Annual Report • Mar 14, 2022
Annual Report
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ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED
DECEMBER 31, 2021
(IN ACCORDANCE WITH THE L. 3556/2007)
| STATEMENTS OF THE MEMBERS OF THE BOARD OF DIRECTORS 3 | ||
|---|---|---|
| ANNUAL REPORT OF THE BOARD OF DIRECTORS4 | ||
| STATEMENT OF CORPORATE GOVERNANCE 65 | ||
| INDEPENDENT AUDITOR'S REPORT98 | ||
| STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2021105 | ||
| STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 31, 2021 106 | ||
| STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED DECEMBER 31, 2021 107 | ||
| CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2021 108 | ||
| NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2021109 | ||
| 1. | ESTABLISHMENT AND ACTIVITY OF THE COMPANY 109 | |
| 2. | BASIS OF PRESENTATION OF FINANCIAL STATEMENTS…110 | |
| 3. | PRINCIPAL ACCOUNTING POLICIES113 | |
| 4. | PROPERTY, PLANT & EQUIPMENT 125 | |
| 5. | RIGHT OF USE ASSETS – LEASE LIABILITIES128 | |
| 6. | INVESTMENT PROPERTY 129 | |
| 7. | INTANGIBLE ASSETS 131 | |
| 8. | OTHER NON-CURRENT ASSETS132 | |
| 9. | INCOME TAX (CURRENT AND DEFERRED)133 | |
| 10. | INVENTORIES135 | |
| 11. | TRADE AND OTHER RECEIVABLES 135 | |
| 12. | CASH AND CASH EQUIVALENTS 137 | |
| 13. | SHARE CAPITAL137 | |
| 14. | RESERVES 138 | |
| 15. | GOVERNMENT GRANTS139 | |
| 16. | RESERVE FOR STAFF LEAVING INDEMNITIES140 | |
| 17. | PROVISIONS141 | |
| 18. | LONG-TERM & SHORT TERM BORROWINGS142 | |
| 19. | DIVIDENDS143 | |
| 20. | ACCRUED AND OTHER CURRENT LIABILITIES 144 | |
| 21. | DEFERRED INCOME 144 | |
| 22. | SEGMENT INFORMATION146 | |
| 23. | REVENUES 148 ANALYSIS OF EXPENSES 149 |
|
| 24. | OTHER OPERATING INCOME / EXPENSES 150 | |
| 25. | FINANCIAL INCOME/EXPENSES151 | |
| 26. 27. |
DEPRECIATION AND AMORTISATION 151 | |
| 28. | PAYROLL AND EMPLOYEE RELATED COST151 | |
| 29. | EARNINGS PER SHARE153 | |
| 30. | COMMITMENTS AND CONTINGENT LIABILITIES 153 | |
| 31. | RELATED PARTIES 155 | |
| 32. | FINANCIAL INSTRUMENTS 157 | |
| 33. | SUBSEQUENT EVENTS159 | |
Statements of the Members of the Boards of Directors (In accordance with article 4 par. 2 of L. 3556/2007)
The Board of Directors Members of the Company "Piraeus Port Authority Societé Anonyme" and trade title "PPA S.A." (hereinafter referred to as "Company" or as "PPA") and the undersigned:
In our above-mentioned capacity and as specifically appointed by the Board of Directors of the Company, we state and we assert that to the best of our knowledge:
Athens, March 14, 2022
| YU ZENG GANG | ZHANG ANMING | LI JIN |
|---|---|---|
| Chairman of the | Chief Executive Officer (Acting) | Member of the Board of Directors |
| Board of Directors | ||
| Passport No ΡΕ1895434 | Passport No PE2110665 | Passport No PE1614410 |
(In accordance with article 5 par. 6 of L. 3556/2007)
The Port of Piraeus (Piraeus Port) is the largest port in Greece, with a coast line spanning over twentyfour kilometers in length and expanding over an aggregate area exceeding five million square meters. The geographic location of the Piraeus Port makes it a vital transportation, trade and supply, tourism and communication hub connecting the Greek islands with the mainland, as well as being an international centre of marine tourism and the commercial passage of cargos. The position of the Piraeus Port is conducive to its operation both as a commercial and touristic gate of Greece and as transshipment hub for the Balkans and Black Sea countries.
The Port of Piraeus is situated at the intersection of sea routes linking the Mediterranean with Northern Europe and its geographic position (south of the 38th parallel) enables major liner ships to access it without significant deviation from the Far East trade routes. It hosts a complex and unique variety of port activities, including Cruise activity, Coastal (ferry/passenger) activity, Container and Car and other General Cargo activities, Ship Repair activities, as well as Free Zone operations under applicable tax and customs legislation in the area currently designated pursuant to Decisions D18/7.8.2013 (Government Gazette B' 2038/22.8.2013) and D18/9.9.2013 (Government Gazette B' 2330/17.9.2013) of the Minister of Finance (Piraeus Free Zone).
Further to the amendment and codification on 24/06/2016 in a single text of the Concession Agreement dated 13/02/2002 between the Hellenic Republic and Piraeus Port Authority S.A., which was ratified by Law 4404/2016 (Government Gazette A 126/8.7.2016) (hereinafter CA), the Company retains the exclusive right to use and exploit the land, buildings and infrastructure that are included in the Piraeus Port until 13/02/2052.
o The implementation of the Investment Plan that multiplies benefits for the local and national economy.
Under Article 7 of the Concession Aggreement between PPA S.A. and the Hellenic Republic, the Company is required to implement, within the First Investment Period, mandatory investments, summed with a total reference cost of 293.8 million Euros, which concern the following:
The Company's declared goal is the further highlighting of Piraeus Port strategic advantages and strengthening its position in the port industry.
The role of the Piraeus Port is not only consolidated but further upgraded through the Investment Plan of PPA S.A., the customer-oriented approaches and the marketing policy, while the outward development and the international collaborations were enhanced.
In the above context, the Company has strengthened its presence in national and international organizations relating to the port industry (detailed reference follows in paragraph b.3, titled "outward looking'').
The basic values that constitute the central core and driving forces of the Company are related to:
The primary concern and duty of the Company is the continuous pursuit of enhancing the Company's long-term financial value and the protection of the general corporate interest and the interests of the Shareholders.
The ultimate aim is the continuous improvement of the port services provided to the port users, at levels comparable to the best practices adopted by ports of international scope. The Company has as its primary concern to build strong and long-lasting relationships with its customers, and to provide excellent service, especially in terms of quality, reliability and delivery time.
The value of human life is the primary Company value, by creating conditions for a safe working environment.
Particular emphasis is placed on the continuous improvement of the systems and procedures related to environment, health and safety in the workplace, through full compliance with relevant legislations.
The Company recognizes that the cornerstone for the achievement of its goals is the best utilization of its human resources. By understanding and respecting the needs of the personnel and by using meritocratic criteria, the Company ensures the continuous training and development of the employees, taking into account the needs of the Company and the protection of the corporate interests.
Corporate Social Responsibility is a daily practice of how the Company operates. Creating relationships of trust and cooperation with local communities is a priority of the Company's Management, which aims at setting up a sustainable development model with the emphasis on environmental protection, poverty aid, supporting education, sport and other charity causes within the capability of the Company.
The formation of the strategic axes of the Company takes into account the very positive perspectives that were formed by the establishment and activation of the COSCO SHIPPING group in the organization.
The Company continues working in order to achieve its strategic objectives, as described below, in a dynamic context that the COVID-19 pandemic has created and which is estimated to affect their implementation.
The 16th edition of the International "GreenPort Cruise & Congress" took place in Greece and it was hosted by Piraeus Port Authority S.A.,lasting from October 20-22, 2021. This influential event on sustainable environmental practices welcomed by PPA as one initiative serving the prime objective to minimize environmental impacts attributable to Port's operations, while being committed to act as a role model in green innovation and environmental performance for the broader industry.
More than 180 decision makers from the port community - port authorities, terminal operators, shipping lines, logistics operators attended the Conference and discussed about the latest news in sustainable development and environmental practice to enable them to effectively implement the changes needed to reduce their carbon footprint and to be more sensitive to environmental considerations and decisions. GreenPort Cruise & Congress 2021 covered a range of themes including the EU's new climate plan, financial and technical challenges to onshore power supply, ports getting ahead for new fuels, collaborative community projects, sustainable transport and logistics in the hinterland connections of the port.
COSCO SHIPPING and the Piraeus Port Authority have launched a joint initiative to release the autobiographical and the most popular novel of Menelaos Lountemis, "A Child Counts the Stars" in Chinese, by Patakis publishers contributing to the dissemination of the Greek culture and the Greek thought through this literature genre to the Chinese people.
The joint initiative of COSCO SHIPPING and the Piraeus Port Authority showcase that synergies in one area, through investing for growth and modernization of the Piraeus Port, bring multiple benefits across the board, towards strengthening of the relationships and establishing strong ties between the two countries, Greece and China.
During an event organized at COSCO SHIPPING offices in Beijing to promote this special initiative, Captain Xu Lirong, Chairman of COSCO SHIPPING at that time, Greece's ambassador to Beijing, Mr. Georgios Iliopoulos and Ministers of the Chinese government have honored the event with their presence and addressed welcome messages to the participants.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
PPA S.A. remains strongly extrovert and actively participates in a series of national and international maritime and maritime oriented/related organizations, trying not only to follow but also to contribute to the developments taking place in the port industry. In the above framework, PPA S.A. participates in:
Piraeus Port Authority participated in the 4th International Import Expo (CIIE), which was held in Shanghai from 5-10 November 2021, under the auspices of the Government of China. The representatives of the Port of Piraeus participated online, due to pandemic measures. However, PPA had an important presence to the Exhibition through the existence of a booth where there was the opportunity of promoting its multifaceted activities and upgraded services to a wide, international and specialized audience targeting to attract more customers and expand the market of the largest Greek port.
For one more year PPA participated in the International Expo Logistics Supply Chain which was held in Athens Metropolitan Expo Center and had the opportumnity to interact with stakeholders from the Supply Chain Industry.
The management of the Company provides direction, leadership and an appropriate environment for its operation to ensure that all its available resources are fully engaged in the achievement of its objectives. The Company's policies at the stages of its productive and operational activity emphasize on implementing procedures based on transparency and fairness, and establishing common principles and rules, through the below principles:
The function of the Administration Board, which supports and advises the other Company bodies in the exercise of their responsibilities, is constituted by the Chairman of the BoD, the CEO, the Deputies and Assistants to the CEO, ensuring better exchange of information, fuller exploration and better evaluation of alternatives, consistency of the Management Team, increasing acceptance of the decision issued.
Clear distinction in the allocation of responsibilities through the assignment of specific duties at all levels of the PPA hierarchy ensures the speed of decision making, the smooth operation of the business and the subsequent effective control of all its actions.
On the basis of this principle, all members of the Company, according to their positions in the hierarchy and qualifications, undertake specific responsibilities and are given the necessary authorities to carry out the obligations arising therefrom.
Responsibility - Accountability - Liability is vital to ensure high performance of the Company.
The Company's Management clearly communicates its expectations and sets out specific objectives to the persons responsible for the execution of specific tasks and duties. Clear communication of expectations and clearly defined goals are aimed at enhancing performance at all organizational levels and structures of the Company.
Through the submission of continuous progress reports to the Management of the Company, the organizational units of PPA S.A. are provided with the possibility to operate within the components of the particular administration principle (Responsibility - Accountability - Liability), as well as to the Company's Management to check its effectiveness.
The primary objective of the Company's Management is to increase its value and protect the legitimate interests of all its shareholders. The PPA S.A.'s management bodies, in the exercise of their discretionary powers, act in accordance with the rule of law in order to avoid unnecessary and unfair solutions. Good administration, both as a principle and as a right, is a particularly useful "instrument" of the Administration in order to ensure the trust of the persons who are managed and to firmly establish the legal certainty and the legitimacy of its actions.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
For PPA S.A., adherence to market rules, participation in international standards of corruption prevention and transparency enhancement, are commitments that are fully in line with its Values and Principles, while at the same time demonstrate the degree of commitment to integrity practices and Corporate Governance.
PPA SA having recognized the importance of the operation of an adequate and integrated Internal Control System (hereinafter "ICS") for achieving its business objectives and in accordance with Law 4706/2020 regarding corporate governance and decision of the Board of Directors of the Hellenic Capital Market Commission 1/891/30.09.2020 as in force from time to time, adopted a policy of periodic evaluation of the Company's ICS as well as of the Implementation of the provisions on Corporate Governance of Law 4706/2020.
The Company's ICS includes five (5) basic elements that exist and operate in the Company and are described in general terms below:
The Company is committed to operate with integrity and ethical values. Its organizational structure determines a specific position and specific and distinct responsibilities for each body and organizational unit of the Company. There are specific benchmarks and areas of responsibility in achieving the Company's goals, while a regulation is followed on the selection and recruitment of staff and senior management as well as a remuneration policy aiming at attracting and retaining highly qualified human resources.
The Company clearly communicates its objectives in the individual Departments in a simple and understandable way, so that they are taken into account during the process of risk identification and risk assessment as well as its acceptable risk tolerance level. In general, the Top Management of the Company determines the way of responding to the risks by categorizing them according to the probability and their impact on the operation of the Company in the following categories:
The recording of the risks faced by the Company as well as the management and risk response procedures, is carried out in all operations of the Company on an annual basis. In addition, the Company has established control mechanisms and safety valves to detect and/or prevent the inability to deal with risks, in order to achieve its objectives.
The Company has a Risk Management function, which operates in accordance with appropriate and effective policies, procedures and tools (such as keeping a risk register) on the determination, analysis, control, management and monitoring of any kind of risk inherent to the operation of the Company.
The Company develops policies and procedures in accordance with the objectives of the Management. In addition, it implements a system of safety valves, based on the risks it has identified, but considering the specific characteristics of the Company. Special emphasis is placed on the adequacy, proper implementation and monitoring of procedures, the handling of error cases and the frequency of reassessment of policies and procedures.
In addition, the Company implements adequate safeguards for issues of conflict of interest, segregation of duties as well as the governance and security of its Information Systems.
The Company ensures the quality of financial and non-financial information and follows appropriate ways of internal and external communication, such as communication with the members of the Board of Directors, shareholders and investors, communication with the existing Company committees, complaint on whistleblowing, Regulatory Authorities etc.
The Company has mechanisms and functions that have as its objective the continuous evaluation of the Internal Audit System and the reporting of findings to be corrected or improved.
The updated Internal Operation Regulation (IOOR) of the Company is the Company's compliance with the requirements of the applicable regulatory framework, as formulated, in particular, by Law 4706/2020 «Corporate governance of public limited companies, modern capital market, incorporation into Greek legislation of Directive (EU) 2017/828 of the European Parliament and of the Council, measures for implementation of Regulation (EU) 2017/1131 and other provisions» (Government Gazette 136/17.7.2020), Law 4548/2018 "Reform of the Company Law (New legislation for Societe Anonymes)" (Government Gazette A '104/13-06-2018), Law 3016/2002 "On Corporate Governance etc." (Government Gazette A 110/17-05-2002) as in force today, the general provisions of the legislation governing companies that have listed shares in the regulated stock market as well as the current Articles of Incorporation of the Company.
This Regulation entered into force with No. 32/2021 Company's Board of Directors decision and its purpose is to depict:
a) The organizational structure, the units' objectives, the committees of article 10 or other standing committees' objectives, as well as the duties of their heads and their reporting lines.
b) The main characteristics of the Internal Control System, i.e. the Internal Audit Department and the functions of risk management and regulatory compliance.
c) The process of hiring and evaluating Senior Executives.
d) The compliance procedure for persons holding managerial duties, as defined in number 25 of par. 1 of article 3 of Regulation (EU) 596/2014, and the persons closely related to them, according to the definition of par. 14 of article 2 hereof, which include the obligations deriving from the provisions of article 19 of Regulation (EU) 596/2014.
e) The procedure for notifying the existence of dependent relations, in accordance with Article 9, of the independent non-executive members of the Board of Directors and of the persons who have close ties with these persons.
f) The procedure to comply with the obligations arising from articles 99 to 101 of Law 4548/2018, regarding transactions with related parties.
g) The policies and procedures for the prevention and management of conflict of interest situations.
h) The policies and procedures of compliance of the Company with the legislative and regulatory provisions that regulate its organization and operation, as well as its activities.
i) The procedure available to the Company for the management of privileged information and the correct information of the public, in accordance with the provisions of Regulation (EU) 596/2014.
j) The policy and procedure for conducting periodic evaluations of the Internal Control System, in particular as regards the adequacy and effectiveness of financial information, on an individual and consolidated basis, as regards risk management and regulatory compliance, in accordance with recognized standards of evaluation and internal control, as well as the implementation of the provisions on corporate governance of this law. This evaluation is carried out by persons who have proven relevant professional experience and do not have dependent relationships according to par. 1 of article 9.
k) The training policy of the members of the Board of Directors, the Executives, as well as the other executives of the Company, especially those involved in internal control, risk management, regulatory compliance and information systems.
l) The sustainable development policy followed by the Company.
The General Staff Regulation drafted as per the provisions of Law 1876/1990 and Article 10A (a) of Law 4404/2016 "Ratifying the amendment dated 24.6.2016 and codification into an integrated text of Concession Agreement dated 13.2.2002 between the Hellenic Republic and Piraeus Port Authority S.A. and other provisions".
The GSR is intended to regulate all employment relations, on the basis of the principles of equality and transparency, with a view to ensuring the smooth and efficient operation of all Company Departments and serving effectively the common interests of the Company and its staff.
As a listed Company, the Company has an independent Internal Audit Department, the operation of which is supervised by the Audit Committee.
Based on the Regulation of Operation of Internal Audit Department as approved by the Board of Directors of the Company, the mission of the Internal Audit Department is to add value and improve the operations of the Company, providing objective and risk-based assurance, advice, and insight. The Internal Audit Department helps the Company to achieve its objectives, adopting a systematic, professional approach to evaluating and improving the effectiveness of Risk Management, Internal Control Systems, and Corporate Governance processes.
During the year 2021, the Internal Audit Department, submitted nineteen (19) internal audit reports according to the Annual Audit Plan of 2021. Regarding other assignments, the Internal Audit Department submitted ten (10) Tender procedures Compliance Reports. Also the Internal Audit Department provided periodic reports for the work performed to the Audit Committee on a monthly, quarterly and annual basis and to the BoD on a quarterly and annual basis.
After the proposal of the Institute for Internal Auditors Greece, PPA participated to its Annual Conference, as a silver sponsor. The Conference was held in the context of the effort to improve the professional development and training of its members and all those involved in Internal Audit, Risk Management, Regulatory Compliance and Governance in general.
Members of the Internal Audit Department, as active members, have gained valuable knowledge and practical tools they can apply to their work, while the principles, standards and best practices of the industry in the private sector have been shared.
The sponsorship reflects the importance PPA attaches and interest in the fields of Internal Audit, Risk Management, Regulatory Compliance and Governance.
The Company maintains an Internal Complaint Process (ICP), which is described in the Code of Conduct that has been approved by the Administration Board with the decision n. 1/17-1-2020.
As part of Good Governance Policy and respect to the company's shareholders PPA SA sees every complaint as an opportunity to assess business processes and improve them whenever possible. It is believed that the ICP will offer the chance to get feedback on the business activities/ operations and will serve as a quick and efficient means of resolving any problems that may arise and will promote good relations and communication between the Company and its employees.
According to the ICP, a complaint falls into the following (indicative) categories:
Should a complaint being made involves a member or members of the Board of Directors or the Audit Committee, or the Administration Board, Internal Audit Department must immediately report the complaint to the Audit Committee or to the Board of Directors respectively, which will forthwith direct the investigations and necessary actions as appropriate.
On a monthly basis, the Internal Audit Department provides to Top Management (Chairman of the BOD, CEO, Deputy CEOs, Assistant CEOs) information regarding the complaints it receives, the actions taken in order to facilitate them and any proposed improvements that need to be implemented.
On an annual basis the Internal Audit Department provides to the Audit Committee a summary report of the above work performed.
During 2021, one (1) complaint was submitted through the ICP, for which the approved procedures were followed.
In 2021, PPA SA continued to maintain its certifications as per ISO 9001:2015, ISO 14001:2015 & ISO 50001:2015 standards for the quality, environmental and energy management for all its activities:
Lloyd's Register (LR) following an external audit conducted in May 2021 verified that PPA SA's certifications remain valid.
Within this framework, PPA SA continued the maintainace and improvement of the certified Integrated Quality, Environmental & Energy Management System, which has been developed in line with these three (3) standards' requirements, aiming at continuous improvement at all fields.
PPA SA works in a consistent way to understand customers' needs and expectations, continually improve the level of services provided, address the environmental challenges emerged in daily operation and improve the energy performance. Moreover, through the energy management certification, PPA seeks ways to reduce energy consumption, increase energy efficiency, minimize the CO2 footprint of port operations and reduce operational cost, while moving towards decarbonization.
According to PPA SA's Quality - Environmental - Energy Policy, that is available on its official website, the company is committed to improving the quality of the provided services, the environmental and energy performance and setting quality, environmental & energy objectives to address risks and opportunities, significant environmental aspects and significant energy uses. These objectives are continuously monitored and reviewed.
PPA SA has adopted new processes and procedures for considering energy performance improvement opportunities during the design of new facilities and activities, the upgrade of current facilities and the renewal and upgrade of equipment according to its Masterplan. Τhe use of alternative energy types and their deployment at the new infrastructure are also under consideration.
Risks and opportunities are defined through systematic analysis of internal and external issues. Significant environmental aspects are defined through assessment of the impact port activities pose or may pose to the environment. Significant energy uses are defined through Annual Energy Reviews.
Also, internal inspections are conducted regularly and the top management, through the Management Reviews, assesses the effectiveness of the Integrated Quality, Environmental & Energy Management System, the achievement of the objectives set and supports actions to ensure continual improvement.
PPA SA through the certification as per these three (3) standards also contributes to the UN Sustainable Development Goals.
Since 2018, PPA S.A. publishes Corporate Social Responsibility Reports according to GRI Standards.
In 2020, PPA SA became an Authorized Economic Operator (AEOF/ Security and Safety) following the issuance of the relevant license.
Following the execution of an over-the-counter transaction, which took place on October 6, 2021, the percentage of voting rights in PPA S.A. directly held by COSCO SHIPPING (Hong Kong) Co. has risen from 51% to 67%.
This change in the share capital of PPA S.A. is due to the transfer from HRADF S.A. of 4,000,000 common registered voting shares (percentage 16%) to COSCO SHIPPING (Hong Kong) Co. The transfer is attributed to an amended Share Purchase Agreement following ratification of the amendment of the Concession Agreement (Law 4838/2021, Government Gazette 180A/ 01.10.2021), the main points of which are the following:
All below mandatory investments part of the concession agreement between PPA S.A. and the Greek Government with a contract total over 32 million euro are on their way to implementation.
The contract was signed for the Herakleous Pier Car Terminal Extension at Keratsini commercial port worth about 20 million euro. Based on the project plan, the existing pier will be extended by 35 acres transforming into a new area measuring 1,100 m. platform width, along with a functioning depth of 12.50 meters and a total surface of 110 thousand square meters. In addition, the project involves the improvement and upgrade of the existing port facilities and computer electronics. The new investment will strengthen the competitiveness of the Car Terminal at Port of Piraeus through the creation of 5,400 new car park positions.
Additionally, the company proceeded with the final stage of contractors' designation for the Mandatory Enhancements No4 and No7 worth about 12.5 million euro.
The above major investments are significant steps forward, allowing Piraeus Port to continue its dynamic sustainable growth path, while further increasing not just the Port of Piraeus but Greece competitiveness overall in the global shipping and trade industry. The progression of the above investments is of great importance and a high necessity for the Port of Piraeus, being the gate to Europe and the world, needing to maintain the already achieved top positions among the leading ports in the Mediterranean and beyond.
The volumes of international trade depend on global economic conditions. The IMF estimates for January this year1 record GDP growth of 5.2% in the Euro area and 5.9% worldwide. These estimates are lower than the previous forecasts in October 2021. Estimates for 2022 show a 4.4% increase in global GDP but this depends on data on the extent of vaccination in developing countries and possible inflationary pressures. The European Commission, in the autumn of 2021, predicts that the euro area economy will expand by 5% in 2021 and 4.3% in 20222 .
The Greek economy is recovering faster than expected with the estimates for the GDP of 20213 to increase by 6.9% after a decrease of 9% in 2020. For 2022 a further increase of the GDP by 4.5% is predicted with a significant degree of uncertainty due to exogenous factors such as the evolution of the vaccination program and international gas/fuel prices.
The total revenues for the year 2021 amounted to € 154.2 million increased by 16.0% or € 21.3 million (2020: € 132.9 million). The increase is mainly due to the significant increase of revenues from the cruise sector and the car terminal sector by 375.1% and 27.6% or by € 7.5 million and € 3.1 million respectively, as well as to the increase of revenues from the container terminal and coasting sector by 21.8% and 14.1% or by € 5.3 million and € 1.2 million respectively. Moreover, there was an increase by 5.4% or by € 3.6 million in the revenue from the Pier II + III concession agreement with PCT . Finally in the shiprepair sector there was a slight decrease in revenues by 3.0 % or by € 0.4 million.
The key operating costs mainly relate to the payroll costs which in 2021 did not show a significant variation and amounted to € 58.5 million compared to € 58.0 million in 2020 (Note 28).
In regard to the remaining operating costs, except for payroll costs, they remainedconsistent toto the prior year figures except for the following:
Provisions for legal cases increased significantly as an additional provision amounting to € 4.4 million was recorded in the current year. During the previous year, a provision of € 2.3 million was recorded and also a reversal of a provision amounting to € 3.6 million was recognized for legal cases that were reevaluated by the Company's Legal Department based on recent events or were ruled in its favor (Note 17 and Note 24).
1 https://www.imf.org/-/media/Files/Publications/WEO/2022/Update/January/English/text.ashx [Accessed 27 Jan. 2022]
2 https://ec.europa.eu/commission/presscorner/api/files/document/print/en/ip\_21\_5883/IP\_21\_5883\_EN.pdf [Accessed 27 Jan. 2022]
3 https://www.minfin.gr/web/guest/proupologismos/-/asset\_publisher/qmvb5pyzdGAQ/content/kratikosproupologismos-
2022?inheritRedirect=false&redirect=https%3A%2F%2Fwww.minfin.gr%2Fweb%2Fguest%2Fproupologismos%3Fp \_p\_id%3D101\_INSTANCE\_qmvb5pyzdGAQ%26p\_p\_lifecycle%3D0%26p\_p\_state%3Dnormal%26p\_p\_mode%3Dvie w%26p\_p\_col\_id%3Dcolumn-2%26p\_p\_col\_count%3D1 [Accessed 27 Jan. 2022]
A significant increase was noted in "Third Party Fees and Expenses" by € 2.4 million, due to the use of external partners by the Company (December 2020) for loading and unloading services as well as in "Third Party Services" by € 1.2 million, mainly due to the increase in the Company's electricity charges.
The "Greek State Concession" fee presented an increase during the current year, by € 0.8 million (31.12.2021: € 2.1 million compared to 31.12.2020: € 1.3 million) which is mainly due to the increase in revenues of the period compared to the fiscal year 2020 (Note 24).
There was an increase in the consumption of materials by 40.0% which in the current period amounted to € 2.8 million while in the previous year was € 2.0 million.
Depreciation did not show a significant change during the current period, amounting to € 17.9 million (31.12.2020: € 18.0 million), (Note 27).
Other operating income for the current year did not change significantly compared to the previous year. However, in the current year an increase was noted in rental income by € 0.4 million, insurance compensation by € 0.2 million as well as in rental subsidy due to Covid 19 by € 0.1 million in comparison with the previous year. This increase was offset the decrease in other revenues by € 0.4 million. Also, during the previous year, the receivable of the contractor company "Pier I" was collected and the amount of € 0.7 million, related to the penalty on late payment was recorded as other income (Note 25).
Other operating expenses for the period amounted to € 0.6 million compared to the corresponding period of 2020 (€ 1.6 million) have been decreased by € 1.0 million. The decrease is mainly due to the reduction of third party compensation by € 0.4 million, the decrease of other expenses by € 0.3 million as well as to the decrease in loss on disposal of property, plant and equipment amounting to € 0.4 million.
In financial income a significant decrease of interest and related income was noted due to the decrease of bank interest during the current year (31.12.2021: € 0.01 million instead of € 0.3 million in 31.12.2020).
The net impairment loss on financial assets did not change significantly during the current year and amounted to € 0.9 million (31.12.2020: € 1.1 million).
In December 2020, management approved the disposal of four (4) Quay Cranes with a net book value of € 1.9 million. For the above quay cranes, based on the valuation that was obtained by an independent appraiser, the Company conducted a relevant tender process to sell the assets directly at scrap value of € 185.0 thousand with a corresponding cost to sell of € 1.5 thousand. As the net book value of the quay cranes exceeded the fair value less cost to sell, an impairment loss was recorded amounting to € 1.7 million, from the application of IFRS 5. The quay cranes were sold during the current year (Note 4).
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Total assets at December 31, 2021 amounted to € 526.2 million, increased by 9.8% or € 47.10 million (31.12.2020: € 479.1 million).
The increase in total assets was mainly due to the following sub-items, namely:
This increase was mainly offset by:
Total liabilities as at 31.12.2021 amounted to € 250.0 million (31.12.2020: € 229.6 million) increased by € 20.4 million. The change in total liabilities was mainly due to the following:
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The implementation of investment plan is to strengthen the financial position and sustainable development of the Company. It will benefit also to the local economy by creation job opportunity and bring tax contribution to the national economy. According to the Concession Agreement, the mandatory investment of the Company is around € 293.8 million of Reference Cost and the additional investment is budgeted around € 167.0 million of Reference Cost. Until end of 2021, the accumulated contracted amount for the above investment is € 250.5 million with the reference cost of € 278.6 million in total, 89.9% of total reference cost.
The accumulated investment amount by end of December 2021 for the above contracts for mandatory investments have been made around € 117.8 million which can be split into completed project € 60.3 million, projects under construction € 51.7 million and prepayments of € 5.8 million.
Apart from the above, the Company completed some additional investments as maintenance infrastructure of the port with the amount of € 6.8 million.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
| a/a | Mandatory Enhancement |
Item Name | Concession Agreement Reference Amount |
Reference amount of contracted projects |
Construction Contract Amount |
Accumulated Investment Amount until Dec 31 2021 (including prepayments) |
|---|---|---|---|---|---|---|
| Amounts in Euros (€) | ||||||
| 1 | ME01 | Passenger Terminal Expansion (South Zone - Phase A) |
136,283,800 | 136,283,800 | 102,954,367 | 32,908,599 |
| 2 | ME02 | Repair of pavements, rails and RMG cranes of Pier I Container Terminal |
8,000,000 | 8,000,000 | 6,800,475 | 6,962,078 |
| 3 | ME03 | Convertion of Pentagonal Warehouse to Passengers Terminal |
1,500,000 | 0 | 0 | 15,888 |
| 4 | ME04 | Underground Tunnel for the connection of G2 Car Terminal to the ex-ODDY area. |
5,000,000 | 5,000,000 | 6,416,285 | 67,334 |
| 5 | ME05 | Upgrade and maintenance of Port Infrastructure |
15,000,000 | 1,270,483 | 854,467 | 1,021,679 |
| 6 | ME06 | Supply of Equipment | 25,000,000 | 25,000,000 | 28,052,761 | 17,564,261 |
| 7 | ME07 | Dredging of Central Port | 8,000,000 | 8,000,000 | 6,128,325 | 87,859 |
| 8 | ME08 | Studies | 5,000,000 | 5,000,000 | 9,600,000 | 2,483,047 |
| 9 | ME09 | Construction of New Oil Terminal |
15,000,000 | 15,000,000 | 19,541,587 | 20,846,402 |
| 10 | ME10 | Expansion of Ro-Ro (Car) Terminal - Hrakleous Pier |
20,000,000 | 20,000,000 | 19,810,488 | 2,337,309 |
| 11 | ME11 | Improvement of Infrastructure of Ship Repair Zone (Including floating docks) |
55,000,000 | 55,000,000 | 50,353,403 | 33,494,387 |
| Total amount € without VAT (A) | 293,783,800 | 278,554,283 | 250,512,158 | 117,788,843 |
| a/a | Additional Investments |
Item name | Budgeted Cost | |||
|---|---|---|---|---|---|---|
| 1 | Development of a logistics center in the former ODDY area, surface of 80.000m2 |
60,000,000 | ||||
| 2 | Construction of two car park buildings, surface of 75.000m2 each in the G2 region |
27,000,000 | ||||
| 3 | Construction of a Cruise Passenger Terminal |
80,000,000 | ||||
| 4 | Maintenance and repair of port and building infrastructure not included in Obligatory Investments |
6,749,511 | 6,749,511 | |||
| Total amount € without VAT (A) | 167,000,000 | 6,749,511 | 6,749,511 | |||
| Total amount (A+B) | 460,783,800 | 278,554,283 | 257,261,669 | 124,538,354 |
There are no suppliers, the interruption of which would jeopardize the operation of the Company in the event of a temporary failure of supplies provision.
The Company takes all necessary measures to minimize the risk and possible losses of assets due to natural disasters or similar related causes.
PPA S.A. has insured all its assets in accordance with the provisions of Article 17.1 of the CA with the Greek State for the following indicative but not limited to perils:
Fire, lightning, explosion, storm damage, aircraft crashes and named perils or Property All Risks, based on new replacement cost of asset.
The income loss due to disaster-related closing of the business facility or due to the rebuilding process after a disaster, i.e. storm, earthquake, flood, strikes, riots and terrorist actions, has been insured.
PPA S.A. maintains insurance in respect of third party liability in accordance with the provisions of Article 17.1 of the CA with the Greek State for all its activities.
According to the requirements of the provisions of Art. 17 and Annex 17.1 of the CA, the company is in the process of finalizing the Maximum Probable Loss (MPL) analysis.
The relevant tender procedure has been completed and the respective contract has been signed with a specialized consulting firm in the field of risk insurance. Currently data collection has been completed and MPL analysis performed by the awarded consulting firm is in progress.
The MPL analysis includes as a minimum the following elements:
A detailed report on the main risks associated with the sector in which the Company operates is set out in Chapter of the Non-Financial Report, which follows (Risk Policy and Risk Management / Major Business Risks and Uncertainties).
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Fair Value: The carrying amounts reflected in the accompanying statements of financial position for cash and cash equivalents, trade and other accounts receivable, prepayments, trade and other accounts payable and accrued and other current liabilities approximate their respective fair values due to the relatively short-term maturity of these financial instruments.
The fair value of variable rate loans and borrowings approximate the amounts appearing in the statements of financial position.
The Company categorized its financial instruments carried at fair value in three categories, defined as follows:
Level 1: Quoted (unadjusted) values from active financial markets for identical negotiable assets or liabilities.
Level 2: Other techniques for which all inflows that have a significant impact on the recorded fair value are identified or determined directly or indirectly from active financial markets.
Level 3: Techniques that use inflows that have a significant impact on the recorded fair value and are not based on quoted prices from active financial markets.
During the year ended December 31, 2021 there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements.
As at December 31, 2021 and 2020, the Company held the following financial and non financial instruments:
| December 31, 2021 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial liabilities | ||||
| Interest bearing loans and borrowings (including short term portion) |
- | 44,499,999.99 | - | 44,499,999.99 |
| Investment property | - | - | 734,338.38 | 734,338.38 |
| Non-current assets held for sale | - | - | - | - |
| December 31, 2020 | Level 1 | Level 2 | Level 3 | Total |
| Financial liabilities | ||||
| Interest bearing loans and borrowings (including short term portion) |
- | 50,499,999.99 | - | 50,499,999.99 |
| Investment property | - | - | 734,338.38 | 734,338.38 |
| Non-current assets held for sale | - | 183,500.00 | - | 183,500.00 |
Credit Risk: There is no significant credit risk for the Company towards the contracting parties, since it receives advance payments or letters of guarantee from customers. In addition, the Company's deposits are placed in bank financial institutions in Greece with the following ratings (Moody's credit rating):
| December 31, | December 31, | ||
|---|---|---|---|
| 2021 | 2020 | ||
| Β2 | 102,383,876.42 | Caa1 | 97,735,374.28 |
| Β3 | 32,775,682.28 | Caa1 | 13,794,460.22 |
| Total | 135,159,558.70 | 111,529,834.50 |
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Foreign Exchange Risk: The Company is neither involved in international trade nor has any long term loans in foreign currency and therefore is not exposed to foreign exchange risk resulting from foreign currency rate variations.
Interest rate risk: The Company has two bank loans which are expressed in Euro and one is subject to fixed interest rate and the other one to floating interest rates (Note 18). The Company does not use derivatives in financial instruments in order to reduce its exposure to interest rate risk fluctuation as at the balance-sheet date. The Company management believes that there is no significant risk resulting from a possible interest rate fluctuation.
The table below presents and analyses the sensitivity of the result in relation to financial assets (cash on hand and in banks) and financial liabilities (loans) of the Company to the interest rate risk changes assuming a simultaneous change in interest rates by ± 100 basis points on the Company's profit.
| 2021 | Decrease | (Increase) | |
|---|---|---|---|
| Financial assets | Accounting values | +100bips(Euribor) | -100bips(Euribor) |
| Cash and cash equivalents | 134,975,285.73 | 1,349,752.86 | (1,349,752.86) |
| Effect before income tax | 1,349,752.86 | (1,349,752.86) | |
| Income tax 24% | (296,945.63) | 296,945.63 | |
| Net effect | 1,052,807.23 | (1,052,807.23) | |
| Financial liabilities | |||
| Long term loans | (44,499,999.99) | (445,000.00) | 445,000.00 |
| Effect before income tax | (445,000.00) | 445,000.00 | |
| Income tax 24% | 97,900.00 | (97,900.00) | |
| Net effect | (347,100.00) | 347,100.00 | |
| Total net effect | 705,707.23 | (705,707.23) |
| 2020 | Decrease | (Increase) | |
|---|---|---|---|
| Financial assets | Accounting values | +100bips(Euribor) | -100bips(Euribor) |
| Cash and cash equivalents | 111,354,314.06 | 1,113,543.14 | (1,113,543.14) |
| Effect before income tax | 1,113,543.14 | (1,113,543.14) | |
| Income tax 24% | (267,250.35) | 267,250.35 | |
| Net effect | 846,292.79 | (846,292.79) | |
| Financial liabilities | |||
| Long term loans | (50,499,999.99) | (505,000.00) | 505,000.00 |
| Effect before income tax | (505,000.00) | 505,000.00 | |
| Income tax 24% | 121,200.00 | (121,200.00) | |
| Net effect | (383,800.00) | 383,800.00 | |
| Total net effect | 462,492.79 | (462,492.79) |
Liquidity risk: The effective management of liquidity risk is secured by ensuring maintenance of adequate cash reserves and a possibility for funding if necessary. Corporate liquidity risk management is based on rationale management of working capital and cash flows.
The following table summarizes the maturities of financial liabilities December 31, 2021 and 2020, respectively, under the relevant contracts to non-discounted prices.
| Amounts of fiscal year 2021 | Current portion | Less than 6 months |
6-12 months | 1 to 5 years | >5 years | Total |
|---|---|---|---|---|---|---|
| Borrowings | - | 3,031,400.42 | 3,029,374.58 | 24,162,066.67 | 14,536,464.99 | 44,759,306.66 |
| Lease liabilities | 3,496.15 | 3,515,530.77 | 10,346.15 | 14,000,000.00 | 91,437,500.00 | 108,966,873.07 |
| Trade and other payables* | 6,653,055.85 | 8,301,662.10 | 4,022,595.27 | - | - | 18,977,313.22 |
| Total | 6,656,552.00 | 14,848,593.29 | 7,062,316.00 | 38,162,066.67 | 105,973,964.99 | 172,703,492.95 |
| Amounts of fiscal year 2020 | Current portion | Less than 6 months |
6-12 months | 1 to 5 years | >5 years | Total |
| Borrowings | - | 3,035,612.50 | 3,033,577.50 | 24,195,360.00 | 20,565,119.99 | 50,829,669.99 |
| Lease liabilities | 3,710.00 | 3,511,860.00 | 8,534.67 | 14,000,000.00 | 94,937,500.00 | 112,461,604.67 |
| Trade and other payables* | 4,581,933.78 | 5,978,848.60 | 3,858,781.59 | - | - | 14,419,563.97 |
| Total | 4,585,643.78 | 12,526,321.10 | 6,900,893.76 | 38,195,360.00 | 115,502,619.99 | 177,710,838.63 |
* Trade payables do not have interest and are settled in up to 60 days. Other payables also do not bear any interest and are settled in up to 12 months.
The primary objective of the Company's capital management is to ensure the maintenance of high credit rating, and healthy capital ratios in order to support and expand the Company's operations and maximize shareholder value. The Company's policy is to maintain leverage targets, according to an investment grade profile. The Company monitors capital adequacy using the ratio of net debt to operating profits, which should be lower than 9.80 based on the loan agreements (Note 18). The debt includes interest-bearing loans and lease liabilities, while the operating profit includes profit/(loss) before taxes, financing costs and depreciation.
| December, 31 | |||
|---|---|---|---|
| 2021 | 2020 | ||
| Long-term borrowings | 38,499,999.99 | 44,499,999.99 | |
| Short-term borrowings | 6,000,000.00 | 6,000,000.00 | |
| Lease liability (long-term/short-term) | 65,435,982.72 | 66,538,481.42 | |
| Total Debt (including lease liabilities) | 109,935,982.71 | 117,038,481.41 | |
| Earnings before interest, tax, depreciation and amortization (EBITDA) | 70,304,423.14 | 58,000,799.42 | |
| - Total Debt / EBITDA | 1.56 | 2.02 |
The Company recognizes both its obligations to the environment and the need for continuously improvement for its environmental performance so as to achieve a balanced economic development in harmony with environmental protection.
The actual and potential impacts on the environment caused by the operation and activities of PPA S.A. are assessed in the approved Environmental Impact Assessment Study of PPA S.A. The company has in force a Decision of Environmental Terms, approved by the Ministry of Environment & Energy, and cares for the correct and full implementation of these Environmental Terms in order to ensure the prevention and reduction of the impact on all the environmental parameters. Within the year 2020, the new 94701/5991/11-12-2020 Decision of Approval of Environmental Terms of PPA SA was issued regarding the renewal and modification of the environmental licensing of all the activities and projects of PPA SA and is valid for 15 years.
In the context of the environmental management system PERS and as EcoPorts network member, PPA S.A. has elaborated and implemented specific environmental policy, procedures of implementation and monitoring of environmental parameters associated with all the activities, while it aims at continuous improvement of its environmental performance, following the European and international standards with aim the protection of the environment and the conservation of the natural resources for future generations.
Thus, Piraeus port is committed to the principles of the ESPO Green Guide and establishes objectives and targets to achieve improvement of its environmental performance.
Taking into consideration all the above and in accordance with the Environmental Terms of port's operation, PPA S.A. has developed and implements the following procedures for the prevention and control of pollution and environmental impacts:
At the same time the Program was recently strengthened with three (3) additional permanent air pollution Monitoring Stations, which were co-financed through the participation of PPA in the European PIXEL and GREEN C PORTS Programs.
PPA SA recognized the need to reduce resource consumption and in particular energy savings throughout the port sector. PPA SA highlights the issue by promoting initiatives and behaviors to improve the balance of the demand and supply of energy and to reduce energy consumption.
In this context, PPA S.A. has installed and operates since August 2016 a photovoltaic power plant producing up to 430 kWp by using solar panels. The photovoltaic plant is connected to the electricity system of DEDDIE S.A. (Administrator of the Greek Electricity Distribution Network).
Promoting equal opportunities and protecting diversity are key principles of the Company. Management does not discriminate in recruitment / selection, pay, education, job assignment or any other work activities. The factors that are exclusively taken into account are person's experience, personality, theoretical training, qualifications, efficiency and abilities.
The Company is in favor of respecting the diversity of each employee and does not accept behaviors that may discriminate in any form whatsoever.
Liable to article 11 b of GSR, the Company, as employer, is: applies the principle of equality in all respects in its employment relations, including the equal treatment of male and female employees.
At 31/12/2021 PPA S.A. employed 960 employees. From this staff:
809 employees (84.3%) covered by collective labor agreements,
145 employees worked on individual contracts (Company Executives, Managers, Deputy Managers, and Assistant Managers, Employees, etc.).
3 were trainee lawyers, 2 were employed on a project contract basis and 1 was an internship.
In addition, there were 23 employees under labor contract of private law for a fixed period.
The gender difference in the Company's staffing is mainly attributable to the labor-intensive characteristics of the main work items of PPA S.A. (dockworkers, operators, lifting equipment operators, heavy-duty drivers). In the 2021's recruitment announcements there were no gender exclusion criteria.
Of the 94 employees assigned in responsibility positions on various tiers of the company's hierarchy (manager, deputy manager, assistant manager, head of sector, superintendent, supervisor), 58 (61.70%) were men and 36 (38.30%) were women.
The women participation among manager, deputy manager, and assistant manager positions reached 31.1%.
The Company respects the rights of employees and observes the Labor Legislation. In the year 2021, no control body accused the Company for violations of labor law.
In 2021 there was a case of an employee appeal to the Labor Inspectorate for unilateral harmful change to the terms of the employment contract.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The Company, as employer, is liable to (articles 11 e, f, g of GSR):
Also, under Article 14.7 of the GCF, provision is made for discharge of their regular work duties throughout their tenure (depending on the number of members) during their term of office to members of trade unions.
The Company, as employer, is liable to (article 11 a of GSR) comply consistently with all labor regulations and all individual and Collective Labor Agreements applicable to its staff.
Safety at work for employees is a top priority and a prerequisite for the operation of the Company.
Company employees have established a Workers' Health and Safety Committee (W.H.S.C.), consisting of their elected representatives in the company.
(a) studying the company working conditions, proposes measures to improve the working conditions as well as the working environment, monitors compliance with health and safety measures and contributes to their implementation by employees,
(b) in cases of serious labor accidents or related incidents, proposes appropriate measures to prevent recurrence,
(c) highlights the occupational hazard in workplaces or work positions and proposes measures to address it, by participating in this way in the formulation of company's policy for occupational risk prevention,
(d) is informed by the management of the occurring occupational accidents' and occupational diseases' data,
(e) is informed for the introduction of new production processes, machinery, tools and materials to the company, or the operation of new installations, insofar as they affect health and safety,
(f) in the event of immediate and serious risk, invites the employer to take the appropriate measures, without excluding the disruption of the machinery or the installation or the production process,
(g) may seek the assistance of experts on Workers' Health and Safety Matters, with the agreement of the employer.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The Company, as employer, is liable (article 11.c of GSR) to take all necessary steps to ensure health and safety at the workplace.
The Company is liable to ensure proper health and safety conditions for all employees and installations under its responsibility. For that purpose, it is liable to apply proper health and safety rules by means of special safety regulations, circulars, announcements and instructions. In particular, the Company is liable to (article 12.3 of GSR):
Ensure, carry out and supervise, through its duly authorised bodies, the implementation of all preventive, operational or corrective measures and procedures necessary to ensure safe execution of all Company operations;
Train its staff to promptly identify all risks and handle same efficiently, in line with the applicable safety procedures;
Keep the staff thoroughly informed of all applicable regulations establishing minimum health and safety standards at the workplace, as in force from time to time.
The company has two Safety Engineers, in accordance with the applicable Legislation, who provide indications and advices to the employer, in matters concerning the safety of employees and the prevention of working accidents (article 14 of Law 3850/2010)
The company has an Occupational Doctor, in accordance with the applicable Legislation, who provides indications and advices to the employer, employees and their representatives, regarding the measures to be taken for the physical and mental health of employees. (article 14 of Law 3850/2010)
The Company, as employer, is liable to ensure, within its powers, that the employees gain all professional knowledge and are offered good opportunities to develop their skills and maximize their efficiency, to the benefit of the Company but also for the development of their own career and personality.
Staff training is one of the Company's development objectives, which improves the quality of the services rendered by the Company and the Company's overall productivity. In this context, the Company plans and subsidizes staff training programs, either on its own or in cooperation with third-party educational/training organizations. The staff shall participate in these programs at Company's cost.
According to article 7.1 of GSR each employee's career development depends primarily on their:
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Financial indicators showing the Company's financial position are presented in the table below:
| Financial Structure ratios | 31/12/2021 | 31/12/2020 | ||
|---|---|---|---|---|
| 1. Current assets | 158,012,453.33 | 131,113,833.15 | ||
| Τotal assets | 526,175,272.31 | 30% | 479,055,785.02 | 27% |
| 2. Total equity | 276,169,642.65 | 249,434,644.23 | ||
| Total liabilities | 250,005,629.66 | 110% | 229,621,140.79 | 109% |
| 3. Total equity | 276,169,642.65 | 249,434,644.23 | ||
| Non-current assets | 368,162,818.98 | 75% | 347,941,951.87 | 72% |
| 4. Current assets | 158,012,453.33 | 131,113,833.15 | ||
| Current liabilities | 42,927,199.62 | 368% | 31,367,852.15 | 418% |
| 5. Borrowings | 44,499,999.99 | 50,499,999.99 | ||
| Total equity | 276,169,642.65 | 16% | 249,434,644.23 | 20% |
| Performance and efficiency ratios | 31/12/2021 | 31/12/2020 | ||
| 6. Profit before income taxes | 49,210,993.70 | 32% | 36,974,026.70 | 28% |
| Revenue | 154,189,971.98 | 132,902,223.89 | ||
| 7. Profit before income taxes | 49,210,993.70 | 18% | 36,974,026.70 | 15% |
| Total equity | 276,169,642.65 | 249,434,644.23 | ||
| 8. Gross profit | 76,814,354.80 | 60,198,685.47 | ||
| Revenue | 154,189,971.98 | 50% | 132,902,223.89 | 45% |
| 9. EBITDA | 70,304,423.14 | 58,000,799.42 | ||
| Revenue | 154,189,971.98 | 46% | 132,902,223.89 | 44% |
The Company uses as Alternative Performance Measures ("APMs") the ratios No 4, 5 and 9, in the context of making decisions concerning its financial, operational and strategic planning, as well as assessing and publishing its performance. These APMs help better understand the Company's financial and operating results, financial position and cash flow statement. Alternative performance measures (APMs) must always be taken into account in combination with the financial results prepared in accordance with International Financial Reporting Standards ("IFRS") and will not replace the latter under any circumstances.
Non-financial performance indicators of PPA S.A. operating activities are set out in the Non-Financial Report below.
The PPA SA continued to be actively involved in the field of research and development in 2021. PPA SA cooperates closely with Greek and foreing stakeholders by implementing initiatives towards developing new technological applications and innovative procedures that create new growth and optimized operation horizons, ensuring the competiveness and inclusiveness of Port of Piraeus in the relevant decision making.
In 2021, PPA S.A. participated as a partner in thirteen (11) European research and development projects, which continue to be under implementation in 2021, details of which are shown in the table below:
| no | Program | Project Name | Full Name | Budget | Eu Funding |
|---|---|---|---|---|---|
| 1 | CEF | Poseidon MED II |
Poseidon MED II | € 915,000 | 50% |
| 2 | CEF | EALING | European flagship action for cold ironing in ports | € 190,300 | 50% |
| 3 | ADRION | SUPER-LNG | SUstainability PERformance of LNG-based maritime mobility |
€ 92,200 | 85% |
| 4 | ADRION | MultiAPPRO | Multidichiplinary approach and solutions to development of intermodal transport in region |
€ 117,260 | 85% |
| 5 | ADRION | NEORION | Green ShipBuilding | € 135,535 | 85% |
| 6 | H2020 | PIXEL | Port IoT for Environmental Leverage | € 274,250 | 100% |
| 7 | H2020 | TRESSPASS | robusT Risk basEd Screening and alert System for PASSengers |
€ 230,625 | 70% |
| 8 | Η2020 | D4Fly | Detecting Document frauD & iDentity on the fly | € 111,125 | 100% |
| 9 | CEF | GREEN C PORTS |
Green and Connected Ports (GREEN C PORTS) | € 455,500 | 50% |
| 10 | H2020 | ARSINOE | Climate Resilient-Regions Through Systemic Solutions and Innovations |
€ 497,500 | 70% |
| 11 | CEF | CIPORT | Cold Ironing in the Port of Piraeus: Taking the Final Step |
€ 170,000 | 50% |
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Within 2021, European research and development projects were submitted for funding, with PPA SA participating as a partner and whose assessment is expected in 2022. Details of which are shown in the table below:
| no | Program | Project Name | Full Name | Budget | Eu Funding |
|---|---|---|---|---|---|
| 1 | ERASMUS-LS | ARGO | Alliance foR innovative and effective STEM traininG in pOrt-centered supply chains |
€ 121,260 | 100% |
| 2 | H2020 | CONFIDENT | MORE EFFICIENT AND EFFECTIVE MULTIMODAL FREIGHT TRANSPORT NODES |
€ 586,250 | 70% |
| 3 | H2020 | MAGNOLIA | Performant, Compliant and Responsible Next-Generation Intelligent Services for Secure, Privacy-Respective and Trust Guarantying Data Space€ |
€ 245,000 | 100% |
| 4 | H2020 | GARDANGELO | A holistic framework for the protection from environmental crimes |
€ 217,500 | 70% |
| 5 | H2020 | SYSTEMIC | A Systemic Approach to Collaborative Regulatory Risk Management in a Cross Sector and Cross-Border Contex |
€ 191,250 | 70% |
| 6 | ADRION | MultiAPPRO Plus (*) |
Multidichiplinary approach and solutions to development of intermodal transport in region PLUS |
€ 21,700 | 85% |
| 7 | ADRION | SUPER-LNG Plus (*) |
SUstainability PERformance of LNG based maritime mobility PLUS |
€ 20,118 | 85% |
| 8 | CEF | JUST IN TIME PORTS |
Just In Time Arrivals and Port Call Synchronisation of Ships with Sea Traffic Management in European Ports |
€ 556,000 | 50% |
(*) The MULTIAPPRO PLUS and SUPER-LNG PLUS are two small projects considered as a continuation of the initial projects MULTIAPPRO and SUPER-LNG respectively. The two PLUS projects were submitted under a restricted call for proposals of the ADRION programme, addressed to beneficiaries of past ADRION actions, aiming to further upgrade project results, as well as to mitigate and overcome the negative effects produced by the COVID-19 pandemic crisis, which partly prevented the wide spreading of projects' outcomes at territorial level and to relevant stakeholders.
In addition to the Report of the Board of Directors entitled "Development & performance of the Company" and the brief description of the business model that has taken place, the following are stated:
PPA is the legal entity entrusted with the administration and operation of the Port of Piraeus. It was established as a legal entity of public law by virtue of Law 4748/1930, which was restated by Compulsory Law 1559/1950 and ratified by Law 1630/1951, each as subsequently amended and supplemented. In 1999 PPA was transformed into a stock corporation (société anonyme).
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Pursuant to the enabling provisions contained in the thirty-fifth article of Law 2932/2001 (Government Gazette A' 145/27.7.2001), the Hellenic Republic and PPA entered into a concession agreement on 13 February 2002 (2002 HRCA). In the 2002 HRCA, the Hellenic Republic granted PPA the exclusive right of use and exploitation of the land, buildings and infrastructure comprising the Port of Piraeus, for an initial term of forty years, and subject to further terms and conditions. Certain amendments to the 2002 Agreement, including the extension of the concession's term by ten years, were authorised on behalf of the Hellenic Republic by virtue of a joint ministerial decision on 19 November 2008 (Government Gazette B' 2372/21.11.2008). These amendments were agreed upon in an addendum to the 2002 Agreement executed between the Hellenic Republic and PPA on 18 November 2008 (the 2008 HRCA). The 2002 Agreement, as amended by the 2008 Addendum (together the Old Concession Agreement), was subsequently ratified by virtue of the first and third article of Law 3654/2008 (Government Gazette A' 57/03.04.2008).
In April 2016, following an open international public tender process, the Hellenic Republic Asset Development Fund (HRADF), under its capacity as the major shareholder of PPA, and COSCO HK Ltd entered into a Shares Purchase Agreement (hereinafter: SPA) for the acquisition of the majority participation of the share capital of PPA. In August 2016, after the satisfaction of certain conditions precedent, the SPA was affected by the execution of the transaction and the transfer of PPA's majority shares from HRADF to COSCO HK Ltd and PPA S.A. ceased to be a state-owned company and since that day it is a private-owned company.
In the framework of the Privatization Process and as envisaged and permitted by the Old Concession Agreement (including, without limitation, article 15.1(iii) thereof), the Hellenic Republic and PPA engaged in negotiations, resulting in the finalization and conclusion of a new amendment of the Old Concession Agreement, which was finally signed by the parties on 29/06/2016 and ratified by law 4404/2016 (Government Gazette A' 126/08.07.2016).
The objective of the Company is to perform its obligations, conduct its activities and exercise its faculties under or in respect of the concession agreement between the Company and the Hellenic Republic dated 13 February 2002 regarding the use and exploitation of certain areas and assets within the Port of Piraeus, as amended and in force (the "Concession Agreement"), in accordance with the law.
For the purpose of attaining its object under paragraph 1 above, the Company may, by way of an illustrative but no means exhaustive list, conduct and engage in the following activities:
(a) use all rights assigned to the Company pursuant to the CA and maintain, utilize and exploit all concession assets in accordance with the Concession Agreement;
(b) provide services and facilities to vessels, cargo and passengers, including ship berthing and cargo and passenger handling to and from the port;
(c) install, organize and exploit all kinds of port infrastructure;
(d) undertake any activities related to the port and all other commercial activities associated with or reasonably incidental to the operation of the port of Piraeus;
(e) engage third parties to provide any kind of port services;
(f) award contracts for works;
(g) engage in such further activities as are prudent or customary for the proper conduct of its business and operations in accordance with the Concession Agreement; and
(h) engage in any and all activities, transactions or operations of a type that are conducted by commercial corporations generally.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
With the resumption of the Cruise Industry in Greece on 14 May, 2021, the industry gradually achieved growth both in terms of arrivals and passenger traffic. Piraeus succeeded in serving a significant number of cruise ship arrivals while implementing the required COVID-19 Health Protocols. The total passenger traffic in 2021 amounted to 303,665 compared to 16,640 in 2020, recording an increase of 1,724.9%. Cruise ship arrivals also increased by 398.7% with 379 arrivals compared to 76 last year.
Following the lifting of restrictive measures of inland sea transport in our country, the activity of coastal shipping recorded an increase in ship routes and passenger/vehicle flows compared to the previous year. The total passenger volume, in 2021, on the domestic lines recorded an increase of 14.7% with 11,896,187 compared to 10,372,523 passengers in 2020. Also, an increase of 11.1% is recorded in the sector of vehicles' traffic, 2,521,898 in 2021 compared to 2,270,845 in 2020.
The performance of the Car Terminal in 2021 has significantly improved, recording an increase of 40.6% due to the increase in both local and transshipment cargoes. Total volume was 429,213 vehicles compared to 305,190 in 2020. Local volumes increased by 14.8% (from 87,310 in 2020 to 100,225 in 2021) as well as transshipment volumes increased significantly by 51% (from 217,880 in 2020 to 328,988 in 2021).
Container Terminal remained fully operational throughout 2021.
The total volume of Pier I increased by 13.9% (from 540,591 in 2020 to 615,510 TEUs in 2021) due to the increase in transshipment volumes and a significant increase in local volumes.
The transshipment volumes increased by 7.8% (from 445,949 in 2020 to 480,912 TEUs in 2021), mainly due to the contribution of the COSCO Shipping group while the local cargo increased by 42.2% (from 94,642 in 2020 to 134,598 TEUs in 2021) corresponding to the increase in imports/exports observed in the Greek economy4 .
In the field of dry-docks, 141 vessels were accommodated in 2021 compared to 121 in 2020 (+ 16.5%), while the total dry-docking days increased by 21.2% (from 958 to 1,161 days). There was also an increase in vessels in the Ship Repair Zone with 264 ships in 2021 compared to 254 the previous year (+4%). The measures and consequences of the pandemic encouraged the undertaking of repair works even from 2020 and the upward trend continued in 2021.
The nature of PPA's business activities depends on numerous domestic and external macroeconomic and geopolitical impact with a focus on the countries of the Southeastern Mediterranean and the countries served through the port of Piraeus. It is further affected by developments in the global port industry in general, as well as the development of individual port activities that are largely related to both PPA's investment program and the level of service provided to port users.
4 https://www.statistics.gr/documents/20181/766fa722-e657-a6b0-e1b1-9ab1c5f9ac39
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
On March 11, 2020, the World Health Organization (WHO) officially declared COVID-19 as a pandemic. The duration and extent of the economic impact of the pandemic on the port related activities still involves significant uncertainty. Despite the pandemic, the port of Piraeus continued providing services to all sectors without interruption, by adjusting the operational model for the strict implementation of hygiene protocols. Although most economies have performed without full-scale lockdowns on 2021, measures taken on 2020 have disrupted supply chains and as a result very high transportation rates have been displayed, vessels experienced longer service times and cargoes remained at ports for a longer period5 . As long as current situation remains the same for 2022 there is a possibility of rearrangement of supply chains as high rates in the Asia-Europe route are pushing importers to alternative, shorter sources of supply.
The commercial port of Piraeus operated without significant increase in cargo service times until the 3rd quarter of the year, retaining a fragile balance. Due to the unusual number of days of harsh weather conditions (September6 , November7 and December8 ) and strikes outside of Company's authority, container and car terminals are currently operating under high percentages of capacity utilization. This fact has forced the intensification of available spaces utilization as well as finding temporary solutions for the storage of cargoes. Subject situation although has been created by external factors is indicative of the necessity of expanding commercial infrastructure of both container terminal and car terminal as well.
Specifically, container terminal has remained fully operational throughout 2021 and has recorded an increase of 13.9%. Significant increase has been displayed in the local cargo traffic where an increase of 42.2% compared to 2020 and 25.1% compared to 2019 is displayed (134,598 TEUs in 2021 whereas 107,608 in 2019). This is attributable to the deferred demand as well as the strategic synergies agreed between container terminals of PPA S.A. and PCT S.A.
In the car terminal sector, the disruption of production chains due to lack of microchips which is severely affecting European factories is specifically obvious9 .
Car production factories have suspended their operations or have drastically limited their production during the peak of the pandemic in the beginnings of spring10. As a result, passenger car registrations in the EU are displaying a decrease during the last 5 months. Due to the efforts of car production groups to cope with the demand, an increase is displayed in the average cargo per vessel and as a result terminal is operating in almost maximum capacity concerning storage area. The increased flows towards Black Sea as a result of the supplying of the area via sea instead of the alternative via the Baltic have further contributed to this situation. Despite the fact that the terminal is operating in almost full capacity since the 2nd half of 2021, an increase of 51% in transshipment traffic has been displayed, exceeding even 2019 traffic. Current situation in transshipment volumes is estimated to continue at least for the 1st half of 2022.
5 UNCTAD. (2021). REVIEW OF MARITIME TRANSPORT 2021 (p. 16). United Nations Publications. Retrieved from https://unctad.org/webflyer/review-maritime-transport-2021
6 https://www.protothema.gr/greece/article/1158585/apagoreutiko-apoplou-logo-ishuron-anemon-se-peiraia-lauriokai-rafina/
7 https://www.protothema.gr/greece/article/1185593/kairos-kakokairia-mehri-kai-tin-triti-me-ishures-kataigides-apota-dutika-epikindunes-vrohes-kai-stin-attiki/
8 https://www.cnn.gr/ellada/story/294074/kakokairia-karmel-aeroplano-pros-hrakleio-epistrefei-stin-athina-logothyellodon-anemon
9 https://www.acea.auto/message-dg/chip-shortage-auto-industry-calls-for-more-eu-made-semiconductors/
10 https://www.acea.auto/message-dg/chip-shortage-auto-industry-calls-for-more-eu-made-semiconductors/
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Car imports in Greece recorded an increase of 27.8% in the first 11 months of 2021 compared to 202011 . Despite the fact that since August there is a negative display compared to 2020, this is estimated to be a result of delivery delays instead of decreased demand.
In the cruise sector, after the almost complete suspension of 2020, cruise operations in Piraeus have restarted on 14 May of 2021, sooner than any other Mediterranean port. The port of Piraeus, by keeping close cooperation with relevant Authorities and by implementing reliable protection protocols combined with operational adjustments, has managed to attract significant number of cruise vessels. In this respect, Piraeus managed to serve 379 vessels (compared to 76 in 2020) out of which 220 as homeport calls (compared to 13 in 2020). Number of cruise vessels that have been served in Piraeus amid the special circumstances of the pandemic is deemed satisfying compared to other traditional Mediterranean ports but the number of passengers remains quite low in relation to the capacity of vessels that have called the port. Although cruise vessels pre-bookings are increased for 2022 even compared to 2019, the volatility of the pandemic conditions is calling for conservative optimism. Nevertheless, the successful handling of the pandemic and the increased vessel calls compared to competition are indicative that the strategy of expanding cruise infrastructure in Piraeus is well-founded. Cruise port expansion which is already undergoing will allow port of Piraeus to capitalize on the successful handling of cruise during the years of the pandemic, consolidating port of Piraeus use as a homeport.
In the coastal terminal sector in 2021, an increase of passenger and vehicle flows is recorded without though traffic reaching 2019 volumes. This is due to the reduction of demand for transportation to islands due to the pandemic, due to the fact that tourist flows although increased are still behind the prepandemic levels as well as due to the restrictions in vessel capacity utilization. Total passenger and vehicle traffic in 2021 have recorded an increase of 14.7% (11,896,187 passengers in 2021 whereas 10,372,523 in 2020) and 11.1% (2,521,898 vehicles in 2021 whereas 2,270,845 in 2020) respectively. This is still behind 2019 volumes though by 28.1% (11,896,187 passengers in 2021 whereas 16,551,054 in 2019) and 8.0% (2,521,898 vehicles in 2021 whereas 2,742,213 in 2020) respectively. Based on these business conditions, the business viability of certain ferry companies is negatively impacted and is estimated that this will affect the number of active companies and vessels in the port.
In the ship-repair sector, an increase of 4% in the number of vessels in the Ship-repair zone is recorded (from 254 in 2020 to 264 in 2021) and by 16.5% in the dry-docks (from 121 in 2020 to 141 in 2021). An increase is also recorded in total days of utilization which increased by 21.2% (from 958 in 2020 to 1161 days in 2021). Despite the increased attraction of vessels, revenues recorded a decrease of 6% due to the decrease of utilization of the larger docks in contrast to the smaller docks due to vessel size. An increase is also recorded in the number of stern-berthing compared to side-berthing mainly due to decreased availability of berthing positions as a result of the Company's investment plan.
11 https://seaa.gr/wp-content/uploads/2021/12/2021-11-PC-YTD.pdf
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
PPA S.A. implements Land and Marine Pollution Contingency Plans, approved by the competent Ministry, for dealing with oil pollution incidents and other harmful substances in the port area. Emergency situations are fully covered by the aforementioned contingency plans.
During the year 2021, 22 incidents of marine pollution and 9 incidents of land pollution were recorded in the area of responsibility of PPA SA (compared to 6 incidents in the marine environment and 9 incidents in the land area in 2020). All the incidents were of small-scale and were addressed by PPA S.A. directly and effectively.
The marine pollution incidents were related to petroleum pollution or oils, and from materials and waste due to heavy rainfall. Incidents of land pollution involved petroleum related leaks or machine oils leaks.
At high-risk areas (Container Terminal and Perama Ship Repair Zone) the Company provides two ambulances with trained rescue personnel (two rescuers per vehicle) that are available 24/7, to cover emergencies that may occur in the above mentioned areas.
To comply with the requirements of the Concession Agreement dated 24 June 2016 concluded between the Hellenic Republic and Piraeus Port Authority S.A. regarding the Use and Exploitation of Certain Areas and Assets within the Piraeus Port, by decision of the Company Management was established a Monitoring Committee of the above concession.
The task of this Committee, in which nine (9) staff members of PPA S.A. and two (2) external legal counselors participate, is to monitor, control and coordinate each responsible PPA S.A. Department actions, relating to the implementation and compliance with the terms of the June 24th 2016 Concession Agreement, within the designated timelines.
The Concession Agreement Monitoring Committee regularly submits progress reports to the Management of the Company for any issue related to the Concession Agreement follow up.
The results of the policies on environmental protection issues are analyzed in a next chapter of this Non-Financial Information Report entitled "Environmental Issues - Non- financial indicators for environmental performance".
The results of the policies on working safety are analyzed in a next chapter of the Non-Financial Report entitled "Employee Issues - Safety working conditions".
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The established Monitoring Committee of the Concession Agreement of 24 June 2016 of the Hellenic Republic and PPA S.A. met eleven (11) times in the year 2021, controlling in any case the obligations arising for the Company under the above contract and submitted duly completed, within the predetermined date the Compliance Certificate of 2021, as defined in Article 14.1 (c) of the Concession Agreement.
Piraeus Port Authority S.A. aims to provide high quality, efficient and safe port services in a sustainable manner, contribute to local and national economy, strengthen the port's position and achieve sustainable growth.
Various factors such as internal and external issues, interested parties' needs & expectations could be considered as possible risks that can or could negatively affect the company in achieving its objectives and strategy and therefore it is vital to be identified and addressed.
The Company determines, evaluates and addresses any possible risks in order to:
PPA's Top Management is committed to ensure the continuing effort to address all risks involved with its operation and undertake all necessary proactive actions.
PPA S.A. is promoting awareness of risk-based thinking to all its departments in order to protect its values and address uncertainty and address the uncertainty and insecurity that is largely due to the international environment. Therefore, each business unit is responsible to implement a risk assessment procedure.
The Company has approved a Risk Management function, which is functionally independent. The main mission of Risk Management is the effective risk management of risks undertaken by the Company as a prerequisite for high standards of Corporate Governance and leads to high efficiency and optimal business performance.
Its purpose is the preparation and implementation of an appropriate methodology for identifying, assessing and managing the Company's risks according to defined criteria and the general coordination of the process through the Company's Departments. Risk Management must have the ability of understanding on important future changes, having at the same time the appropriate strategically treatment.
Risk Management has direct access to all the elements which are necessary for the proper performance of its duties and submits written reports to Top Management regarding the implementation of appropriate and effective policies, procedures and tools (such as keeping a risk register) on the determination, analysis, control, management and monitoring of any kind of risk inherent to the operation of the Company.
Risk management carries out the responsibilities assigned by Law 4706/2020, decision 1/891/30-9-2020 of the Hellenic Capital Market Commission's Board of Directors and the best practices framework.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The main purpose of the document is to establish the general Risk Management Framework which consists of the following:
The purpose of this Policy is not to eliminate the risk, but to effectively manage the risks involved in the activities of the Company and its subsidiaries in order to maximize opportunities and minimize adverse effects.
Specifically, the organization:
The review and update are carried out at least once a year and necessarily before the implementation of any change, so that the Company is informed in a timely manner about the upcoming changes to which it must react and prepare accordingly. Documented information as evidence of the results of monitoring and measuring the actions taken, is maintained by each competent department as well as by the Department of Quality Control and Inspection. During the Management Review, the Quality Control and Inspection Department presents all the necessary information and data on the progress and effectiveness of the actions taken to address the risks.
The above procedure is included in PPA's Procedures' Manual that has been approved by Top Management's decision. The same approach is also followed for energy related matters within the framework of the Energy Management Certification as per ISO 50001:2018 standard under the coordination of PPA SA 's Energy Management Team. The company determines, evaluates and addresses any possible risks related to energy in order to improve energy performance. Significant Energy Uses are defined through Annual Energy Reviews. During Management Reviews by the Top Management, all necessary information and data on the energy performance, the progress and effectiveness of actions taken to address energy related risks are presented to Top Management for further decision making. Thus, achieving continual improvement.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The maintenance of the stable economic environment in the country is directly related to the volumes of imports and exports and consequently to the volumes of serviced goods that offer the highest average income to the Company. Although the estimates and indications for the economic climate of 2022 in the first months of the year are positive, the pandemic data have structurally changed the economic environment, affecting the transport chains and the degree of risk from health reasons, mainly in the cruise industry where the risks from any new outbreak remain. Regardless of the economic impact that varies between sectors, the pandemic has highlighted the importance of the time factor in impact assessment. Since the beginning of the pandemic, the Company has made assessments of the financial impact on its operation and constantly monitors on a daily basis the developments in the directly related sectors such as cruise, coastal shipping and the production chains of final products and vehicles in order to assess and take risk mitigation measures. In addition to the effects of the pandemic, significant geopolitical liquidity is being recorded in the eastern Mediterranean and the Black Sea, further exacerbating uncertainty about trade flows and volumes. The Company also monitors the developments in this field and makes assessments for any positive or negative effects on the transhipment volumes.
Geopolitical and economic instability in the countries of North Africa, Asian Mediterranean and Black Sea can negatively affect the transit loads served by Piraeus. The slide of the Turkish pound made Turkish exports more competitive but at the same time hit domestic demand and made it difficult to import raw materials, creating instability to an important economic partner for Greece. For the risk mitigation, the Company aims to strengthen and develop a rail link with Central Europe and seeks cargo and customers to extend the port inland to the north, reducing the dependence on markets with maritime borders to the south and southeast.
The recent sharp increase of electricity prices due to numerous factors affects the Company's operating costs to a significant decree. The Company has taken into account this burden and adjusts its charges, while it is in discussions with the energy provider to find the best solution to avoid unexpected differences in operating costs from rising electricity prices.
The Green Deal policy creates the prospect of using natural gas as a marine fuel. The Company in cooperation with the sellers and distribution of natural gas participates in a European funding program with the aim of implementing competent solutions and infrastructures so that the ships in the port can be supplied with natural gas. In this way, the Company aims to maintain its competitive advantage, as well as to comply with the regulatory requirements of the European Directives.
The Company, through the cooperation with the neighboring container terminal under PCT S.A., managed to significantly alleviate the very high dependence it had for many years from a customer. In 2021, the cooperation with PCT S.A. contributed approximately at 55% to the total shipment. In addition to the above action, the Company has adopted a customer-centric character while at the same time implementing an aggressive policy to attract new customers. However, the structure of the container transport market provides limited options for attracting new cargo in the short term.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Piraeus, which relies mainly on transit cargo from Asia due to its distance from EU production centers, could lose competitiveness. But at the same time, changing the supply chain also provides opportunities. The Company has intensified discussions with European and Asian car manufacturers to point out the benefits of Piraeus. The tension in Ukraine and Kazakhstan that may lead to further deterioration of the prices of raw materials for electricity generation is a risk for the financial planning of the Company. To address the risk, the company adjusts its tariffs and is in discussions with the energy provider to find the best solution to avoid sharp differences in operating costs from rising electricity prices.
A detailed presentation of a mixture of general and sectoral indicators took place in the module Business Model - Evolution of Business Activities with a distinct reference to traffic data of each Company's business sector (Cruise, Coastal Shipping, Car Terminal, Container Terminal, and Ship Repair).
It is pointed out that, PPA SA has included all the elements of non-financial information in the Corporate Responsibility and Sustainable Development Report 2021 which will be created and published based on the international standard Global Reporting Initiative (GRI), version. The Report will be uploaded on the corporate website (www.olp.gr) in the section "Social Responsibility".
In addition, PPA SA recognizing that the international ESG indicators (in the already published Corporate Responsibility and Sustainable Development Report 2020, there is a special reference to ESG issues entitled "ESG Data Scorecard") are a strategic tool for investor support in the context of identifying risks and opportunities associated with the viability of their investment portfolio and responding at the same time to the challenges of the new environment, builds a sustainable development strategy, aiming to minimize the negative impact that its activities may have.
The Company's long-term commitment to Sustainable Development has already led to its participation (August 2020) in the new ATHEX ESG index of the Athens Stock Exchange, in the initial composition of which 35 companies participate, including PPA SA.
As demonstrated in the Corporate Governance Statement, PPA SA attaches great importance to Sustainable Development and taking into account both the new legislation on Corporate Governance and the principles of Taxonomy (EU Taxonomy).
The Taxonomy Regulation is a key component of the European Commission's action plan to redirect capital flows towards a more sustainable economy. The EU Taxonomy is a classification system, of activities that can under certain conditions be considered as environmentally sustainable or as activities that enable the transition to environmental sustainability. Under the Taxonomy regulation, companies and organizations can attract funds to develop their sustainable activities as well as expand them further, provided they meet certain criteria. The compliance with said criteria is monitored continuously and reported on an annual basis, included in the non-financial section of the respective annual report.
Taxonomy-eligible economic activity means an economic activity that is described in the delegated acts supplementing the Taxonomy Regulation.
The key performance indicators ("KPIs") include the turnover KPI, the Capex KPI and the Opex KPI. For the reporting period 2021, the KPIs in relation to Taxonomy-eligible and Taxonomy-non-eligible economic activities (Art. 10 (2) of the Art. 8 Delegated Act) are as follows:
| Eligible | Non-eligible | |||
|---|---|---|---|---|
| €000 | % | €000 | % | |
| Turnover | 74.171.3 | 48.10% | 80,018.7 | 51.90% |
| CapEx | 35,422.1 | 91.01% | 3,500.8 | 8.99% |
| OpEx | 935,9 | 35.09% | 1,731.3 | 64.91% |
On a voluntary basis, we provide below the split of the turnover, Capex and Opex KPI per Taxonomy-eligible economic activity to report more transparently on our KPIs. The calculation of these numbers is based on the same accounting policies as for the mandatory KPIs.
| Activity | Turnover | CapEx | OpEx | |||
|---|---|---|---|---|---|---|
| €000 | % | €000 | % | €000 | % | |
| Electricity generation using solar photovoltaic technology |
36.3 | 0.02% | 0.0 | 0% | 6.0 | 0.22% |
| Vessels for port operations and auxiliary activities |
4,748.2 | 3.08% | 210.6 | 0.54% | 187.2 | 7.02% |
| Infrastructure for water transport |
69,386.8 | 45.00% | 35,211.5 | 90.46% | 742.7 | 27.85% |
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
I. Τurnover KPI. The proportion of Taxonomy-eligible economic activities from the total turnover has been calculated based on the net turnover from services corresponding to Taxonomy-eligible activities (numerator), divided by the total net turnover (denominator), both of which referring to FY2021. The denominator of the turnover KPI is based on the net turnover in accordance with IAS 1.82(a). Specifically, the total turnover of PPA SA is presented in the "Revenue" line of the "Statement of Comprehensive Income for the year ended December 31, 2021" of the Company.
II. CapEx KPI. The CapEx KPI is defined as Taxonomy-eligible Capex (numerator) divided by total Capex (denominator). As for the reporting period 2021, we only report in the numerator on CAPEX from taxonomyeligible economic activities, as there are no CapEx plans to upgrade a taxonomy-eligible economic activity to become taxonomy-aligned or to expand a taxonomy-aligned economic activity. In addition, we have not reported purchases of output from taxonomy-eligible economic activities and individual measures, enabling certain target activities, as reliable statements on the taxonomy-alignment of our suppliers' output are currently not available and we are not obliged to assess the taxonomy-alignment of our individual measures for the purposes of the simplified reporting. The total capital expenditure contains the additions to property, plant and equipment as well as intangible assets and right-of-use assets during the fiscal year, before accounting for depreciation, amortization and any re-measurements, including those resulting from any impairments.The total capital expenditure is can be reconciled to the sum of the following main items in line "Additions" in "Property, Plant & Equipment" (Note 4), line "Additions" in "Right of use assets – Lease liabilities" (Note 5), as well as line "Additions" in "Intangible Assets" (Note 7) in the "Annual Financial Report for the year ended December 31, 2021".
III. OpEx KPI. The Opex KPI is defined as Taxonomy-eligible Opex (numerator) divided by our total Opex (denominator). The definition of EU Taxonomy for the operational expenses includes expenses for research and development, renovation of buildings, maintenance and repair, as well as any other direct expenses related to the day-to-day maintenance of property, plant and equipment. Total Opex consists of direct noncapitalised costs relating to repair and maintenance and short term leases (denominator). It does not include expenditures relating to the day-to-day operation of PP&E such as: raw materials, cost of employees operating the machine, electricity or fluids that are necessary to operate PP&E. Similar to CAPEX above, for the reporting period 2021 we only report in the numerator on OpeX from taxonomy-eligible economic activities, as there are no Opex plans to upgrade a taxonomy-eligible economic activity to become taxonomyaligned or to expand a taxonomy-aligned economic activity. In addition, we have not reported purchases of output from taxonomy-eligible economic activities and individual measures, enabling certain target activities, as reliable statements on the taxonomy-alignment of our suppliers' output are currently not available and we are not obliged to assess the taxonomy-alignment of our individual measures for the purposes of the simplified reporting.. The total operational expenses of PPA SA are presented in Note 24 "Analysis of expenses" and specifically in the breakdown of "Third-party services" as well as in "Right of use assets – Lease liabilities" (Note 5) referring to the lease expense of less than 12 months in the "Annual Financial Report for the year ended December 31, 2021". The accounting principles used in the preparation of the table presented above are outlined in Note 3 "Principal Accounting Policies" in the "Annual Financial Report for the year ended December 31, 2021". The financial report of PPA SA has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (E.U.).
The current section is included in the Non-Financial Information Report for the first time, as stipulated in EU Regulation 2020/852. The information presented herein abide by the Regulation's requirements and the Delegated Acts issued as of the time of this publication. The related guidelines have a relative margin of interpretation and are constantly involving to adjust to the needs of the process. Following this, PPA SA will pay close attention to the related developments and will adjust its approach accordingly regarding the assumptions and applicable methodology.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
| Activity | |||
|---|---|---|---|
| eligibility breakdown | €000 | % | |
| Turnover | Eligible | 36.3 | 0.02% |
| CapEx | Eligible | 0.0 | 0% |
| OpEx | Eligible | 6.0 | 0.22% |
This activity consists of the construction or operation of electricity generation facilities that produce electricity using solar photovoltaic (PV) technology.
Eligible PPA activity description: The Company constructed in 2016 a 430 kWp photovoltaic plant which has been operating within the Container Terminal area, generating energy from solar panels. The photovoltaic power plant is connected to the national grid and all the energy generated is supplied to the local medium voltage grid. The installation enhances the use of Renewable Energy Sources (RES) in the port area by providing "green" power to the grid thus contributing to avoiding the GHG emission that would be generated by a power plant that would utilize fossil fuels. The production levels were slightly reduced between 2020 (676.66 kWh) and 2021 (639.61 kWh).
| Activity | |||
|---|---|---|---|
| eligibility breakdown | €000 | % | |
| Turnover | Eligible | 4,748.2 | 3.08% |
| CapEx | Eligible | 210.6 | 0.54% |
| OpEx | Eligible | 187.2 | 7.02% |
This activity consists of the purchase, financing, chartering (with or without crew) and operation of vessels designed and equipped for transport of freight or for the combined transport of freight and passengers on sea or coastal waters, whether scheduled or not. Moreover, the activity includes the purchase, financing, renting and operation of vessels required for port operations and auxiliary activities, such as tugboats, mooring vessels, pilot vessels, salvage vessels and ice-breakers.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The Company owns and operates 3 floating tanks (elevators) that are used in shipbuilding and ship repairing operations as auxiliary equipment/infrastructure. These vessels, play an integral part in the processes of shipbuilding and ship repairs as they enable the total removal of ships from the sea in order to be tended to properly. The vessels function with the use of electricity and batteries thus reducing their direct GHG emissions significantly and contributing to the reduction of the ship repair operations' emissions output.
| Activity | |||
|---|---|---|---|
| eligibility breakdown | €000 | % | |
| Turnover | Eligible | 69,386.8 | 45.00% |
| CapEx | Eligible | 35,211.5 | 90.46% |
| OpEx | Eligible | 742.7 | 27.85% |
This activity consists of the construction, modernization and operation of waterways, harbor and rivers works, pleasure ports, locks, dams and dykes and other, including the provision of architectural services, engineering services, drafting services, building inspection services and surveying and mapping services and the like as well as the performance of physical, chemical and other analytical testing of all types of materials and products and excludes project management activities related to civil engineering works.
The Company owns and operates the port of Piraeus, the largest port in Greece and its surrounding area, including facilities and infrastructure for commercial purposes. In the framework of its operations, the Company also undertakes maintenance and modernization tasks of said facilities. The services provided to incoming marine traffic include inter alia the provision of shore-side services vessels at berth, loading, unloading and transshipment of goods.
Corporate Responsibility is an integral part of our operations. Creating relationships of trust and cooperation with local communities is a Management priority which seeks to establish a sustainable development model focused on environmental protection, charity work and the support of education,sports and cultural activities, to the best of the Company's ability.
The Company acknowledges that development of its human resources is the cornerstone in achieving its goals. Through understanding and respecting employee needs and applying merit-based criteria, the Company ensures the ongoing training and development of its employees, considering the needs of PPA S.A. and the protection of corporate interests.
At PPA S.A. we uphold the United Nations 2030 Agenda, as such is represented by the 17 Sustainable Development Goals for 2030.
Our intention is to actively contribute to their achievement by promoting the population's well-being and security, protecting the environment and combating poverty.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Our priority is to achieve those goals directly linked to the activities and challenges specific to our sector and to all material aspects arising from this report. The table below details how our programmes and actions are associated with the Sustainable Development Goals.
During 2020, the Company has established the "PPA S.A. Code of Conduct", which was distributed to all staff and members of the Management. The PPA S.A. Code of Conduct has been developed taking into account the OECD Guidelines for Multinational Enterprises. At PPA S.A. we consider our people as our most valuable asset. We thus invest in our human resources in order to maximise their efficiency, organisation and the services they provide. We take steps to ensure responsibly excellent working conditions, benefits, advantages and training and advancement opportunities for our people, even in the difficult circumstances that we had to face in 2020 due to the COVID-19 pandemic.
PPA S.A. aims to provide high-quality and efficient port services safely, contribute to the local and national economy and strengthen the port's position through sustainable development. Various factors, such as internal and external issues or stakeholders' needs and expectations, could be seen as potential risks that negatively affect or may negatively affect the Company in achieving its objectives and strategy; therefore, it is necessary to identify them in order to be able to address them. The Company's Management undertakes to ensure that continuous efforts are made to address all risks associated with its operation and take all necessary preventive actions. PPA S.A. promotes risk-based thinking in all its Departments to protect the Company's values and address uncertainty. Each Business Unit is therefore responsible for the implementation of a risk assessment procedure.
The Company respects human rights as well as the rights of employees and observes the Labour legislation. To this end, the following issues are material to the Company.
There are four first-degree Associations (Association of Permanent Employees, Association of Technicians & Operators, Association of Dockworkers, Association of Supervisors - Foremen) and one second-degree Association (Federation of Permanent Port Employees of Greece) at PPA S.A. The Company's Management is in close cooperation with the employees' representatives to ensure the proper functioning of its services and to promote the common interests of the Company and its employees.
The Company's basic principles include the promotion of equal opportunities and the protection of diversity. The Company's Management makes no discrimination in terms of personnel recruiting or selection, earnings, training, assignment of work-related tasks or other work activities.
The Company favours respecting the diversity of each employee and does not tolerate any behavior that could lead to discrimination of any form.
At PPA S.A., the experience, personality, theoretical training, qualifications, efficiency and competences of each individual are the main factors that determine their choice for more complex and demanding positions of responsibility. Characteristics related to candidates' gender, age, religion, origin and colour, physical particularities or beliefs are not reasons for their preference or exclusion. In this way, we promote a climate of equality, which in turn is anchored in respect for diversity and human dignity. At the same time, we have put in place three key tools for supporting equal opportunities and diversity.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Furthermore, in accordance with the applicable Enterprise-Level Collective Labour Agreement, we provide our employees with a series of additional benefits, in order to meet their medical and financial needs, thus contributing to the health and well-being of their families. These benefits testify to our intent to invest in our employees and our commitment to providing a quality work environment.
PPA S.A. acknowledges the importance of ensuring safe conditions and workplaces for its personnel, as well as safe transportation conditions for all involved parties, customers, passengers, etc. Safety at work for employees is a top priority and a prerequisite for the Company's operation.
The Company as an employer is obliged to take all appropriate measures to protect the safety and health of employees in the workplace.
PPA S.A. ensures health and safety conditions for employees and their areas of responsibility. We thus establish health and safety rules through circulars, announcements and instructions.
As a business organisation that prioritises transparency and continuous communication of its actions, we systematically interact with our Stakeholders, who form either part of the Company's internal environment (Shareholders, Employees) or external environment (Suppliers, Customers, Local Communities, NGO Representatives) and are directly or indirectly affected by our actions. Our main concern is to be in constant and active communication with our stakeholders, with the aim of building mutual trust and excellent cooperation. Maintaining the dialogue and interaction with each of our key stakeholders and improving our relationship with them, is particularly important to identify their needs and expectations which are essential for our operations.
More information can be found in the annual Corporate Responsibility and Sustainability Report at https://www.olp.gr/en/corporate-responsibility/social-responsibility.
PPA S.A. recognizes that the resources consumption must be granted in an efficient way across the port sector. Piraeus' port nature and size favors a high amount of daily energy consumption (e.g. ship-to-shore cranes, terminals lighting, reefer containers, administration buildings, workshops). PPA S.A. raises awareness on the subject by promoting initiatives and behaviors to improve the balance of the demand and supply of energy and to reduce energy consumption.
In this scope, PPA's first photovoltaic station generating energy using solar panels operated in July 2016, generating up to 430 kWp. The photovoltaic Station is linked up to the grid of DEDDIE S.A. (Administrator of the Greek Electricity Distribution Network).
Electricity and oil usage have been identified in various energy efficiency reviews as an area for potential reduction. Indicative energy saving measures implemented by PPA S.A. are:
The quantities of port -generated domestic and recyclable «blue bins» waste from all premises and activities of PPA S.A. for the years 2020 and 2021 are presented in the Table below.
In 2020 there was a significant reduction in generated domestic waste, which is mainly due to the significantly reduced traffic of the passenger port due to the restrictive measures of the pandemic. In 2021, although the operation of the port has been normalized, again it can not be considered representative as the limitations of the pandemic remain in part.
It is noted that within 2021, some by-cases, emergency cleaning works of the port took place, from which significant quantities of recyclable waste (mainly metal and wood) were produced. These recyclable quantities are presented but are not comparable with the rest of port-generated waste as they do not concern the normal operation of the port facilities.
Finally it is noted that the table below does not include the hazardous and operational waste οf the facilities driven to recovery (mainly produced at PPA's workshops).
| 2020 | 2021 | |
|---|---|---|
| Waste of PPA installations* | ton | ton |
| Domestic waste (non-hazardous municipal waste) | 574 | 755 |
| Recyclable packaging waste (paper, plastic, glass, metal, wood) | 254 | 334 |
| Recyclable waste from special cleaning works (metal, wood, | ||
| etc.) | 380 | 175 |
*The data of waste of each company are finalized by submitting the annual Waste Report to the Electronic Waste Register (HMA) of the Ministry of Environment and Energy (submitted for each year on March 31 of the following year). The waste data for the year 2020 have been finalized by registering the annual Waste Report of 2020 in the HMA. However, the above waste data for 2021 have not been finalized yet in the HMA. The finalized waste management data, including the categories of operational and hazardous waste will be presented in detail in the Annual Corporate Responsibility Report 2021 of PPA SA.
| 2020 | 2021 | |
|---|---|---|
| Sea area accidental pollution | ||
| (no. of incidents) | 6 | 22 |
| Land area accidental | ||
| pollution (no. of incidents) | 9 | 9 |
The above data show that in the year 2021 the incidents of marine pollution were increased while the incidents of land pollution remained stable compared to 2020. In both cases, both years, all the incidents were small and local and were treated immediately without problems, by implementing the contingency plans of PPA S.A.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
According to the environmental condition no. 4.6 of the new decision approving the environmental conditions of the PPA (YPEN/ DIPA/94701/5991/11-012-2020), the PPA has the obligation to implement a new specialized Noise Monitoring Program in the entire port area.
In this context, the new Noise Monitoring Program was prepared in accordance with the forecasts of the new AEPO.
Subsequently, the implementation of the new Noise Monitoring Program was assigned to a specialized company. In this context, in December 2021, the noise measurements of the Winter Semester started (duration of measurements 1 month). It is noted that the locations of the measurements, the duration of the measurements and the noise level limits applied in 2020 have been completely revised in the new Noise Monitoring Program of 2021.
As mentioned above, PPA SA in collaboration with NTUA, implements a special program for the monitoring of air quality through a permanent monitoring station in the passenger port. For the year 2021, in present time the data of the first half have been finalized.
Data from the first semester of 2021 show the following main conclusions:
For the years 2020 and 2021 no complaint related to environmental issues was recorded.
Furthermore, it is stated that within 2021 a fine of a total amount of € 6,000 was paid by PPA SA for issues of compliance with environmental legislation. The fine was imposed by the Attica Prefecture, following an autopsy on 11-06-2021 at the site of the project of the South Extension of the passenger port of Piraeus. It is also reported that within 2021 another fine of € 6,000 was paid by PPA SA for issues of compliance with environmental legislation. The said fine was imposed by the Attica Prefecture following an autopsy on 16- 11-2020 at the site of the project of the southern extension of the passenger port of Piraeus.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
| 2020 | 2021 | |
|---|---|---|
| Total energy efficiency of photovoltaic power station (kWh) |
676.66 | 648.30 |
| Emissions' Reduction (saving of) CO2 (tn) | 575.16 | 551 |
From the above data it is concluded that the P/V Station presents a stable energy production as well as a stable contribution to the reduction of CO2 emissions and therefore a stable contribution to the improvement of the environmental footprint of the PPA.
| Research program | COST (€) | ||
|---|---|---|---|
| 2020 | 2021 | ||
| Acoustic Environment Monitoring Program for the total of PPA area | 5,670 | 22,700 | |
| Seawater Quality Monitoring Program of PPA S.A. area | 19,000 | ||
| Marine Sediments Quality Monitoring Program of PPA S.A. area | 6,300 | 16,000 | |
| Air Quality Monitoring Program_ Station installation, measurements, | |||
| air quality monitoring and measurement evaluation at the port area of Piraeus | 36,000 | 36,000 |
The Company pays particular attention to social contribution, as demonstrated and expressed through the timeless efforts and initiatives of both Management and Employees. The Company aims to contribute to the development of society and especially the creation of added value for the communities that surround it.
PPA S.A. pays to the Hellenic Republic an annual concession fee which, equals to three point five percent (3.5%) of the annual Consolidated Revenue of the Company. With effect from the Effective Date of the new concession agreement, the annual Concession Fee shall not be less than € 3,500,000. Further to the Concession Fee, PPA S.A. pays all taxes, duties, levies, VAT, contributions and charges as imposed by generally applicable tax law. No special privilege arising from Concession Agreement in connection with tax matters is given to the Company.
PPA S.A. published its 3rd Corporate Responsibility Report for 2020, which presents in detail all the responsible actions and policies that the company implements, as well as its positive impact on the wider society, the environment, the local and national economy, adopting modern and strict standards of transparency in Sustainable Development and Corporate Responsibility.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
In addition to the strengthening of the national economy and boosting the local economy employment, the table for financial support of local communities by PPA S.A. for the year 2021 (compared with the corresponding amounts for the year 2020), concerns the following:
| 2020 | 2021 | % 2020/2021 | |
|---|---|---|---|
| Economic support of vulnerable social groups of neighboring municipalities, orphanages, special schools etc |
407,675 | 226,373 | -44.47% |
| Facilitating the charitable effort of the Holy Metropolis of Piraeus, Nikaia and St. Nicholas Church |
70,000 | 40,000 | -42.86% |
| Facilitating sports clubs and athletes | 31,170 | 35,400 | +13.57% |
| Aiding cultural associations of Piraeus Region | 23,100 | 2,372 | -89.73% |
| Other donations | - | 242,150 | - |
| TOTAL | 531,945 | 546,295 | +2.70% |
PPA S.A. as an actively participating company in the local society taking seriously its Corporate Social Responsibility with the vision to support the local communities and to improve the living standards of the citizens of the surrounding municipalities, announced the construction of a new modern playground park and a bike lane inside the port zone at the cruise terminal area, which will be available for all the citizens to visit and enjoy its recreational spaces. The construction cost will be covered by Piraeus Port Authority.
More specifically, PPA will transform an area of 8,000 sq. m. (without including the additional parking area) of the cruise terminal to an open space and modern playground park based on high environmental and security standards, which will meet the needs of the citizens of the surrounding area. The access to the new playground park may be accomplished on foot, using public transportation or by car, as a parking area with 50 parking slots will be located near the playground park.
The PPA S.A. Management during a special event that took place at the "Miaoulis" Cruise Terminal, announced the granting to the Hellenic Coast Guard of 9 offices, alongside other indoor and outdoor space areas totaling 1,100 square meters, to cover the housing needs of the Special Forces division (KEA). It is pointed out that PPA S.A. also covered the cost involved for the remodeling and renovation works of the spaces offered.
In addition, PPA S.A. granted a space area within the Port of Piraeus zone to the Greek Ministry of Shipping and Insular Policy to cover the Ministry employee parking needs providing room to 170 vehicles.
As it is known, PPA S.A. in the context of the Corporate Social Responsibility organizes a series of actions and activities towards the vulnerable groups of the local communities especially during the Christmas holidays. In 2021, for first time, it was decided the expansion of its action plan for the Easter period, through the provision of 3,000 gifts for the children of economically weak families of the neighboring municipalities.
At the same time, PPA continued to support the meals distribution of the Holy Metropolis of Piraeus and the social groceries of the adjacent municipalities.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Recognizing the need to support the new generation and broaden knowledge through the educational process, PPA S.A. through educational visits and guided tours in its premises provides the opportunity to get acquainted with the objects of operation.
A large number of pupils and students of educational institutions of all levels, from Greece and abroad, visit the PPA S.A. installations every year.
In 2021, due to special conditions and restrictions due to the pandemic, only a limited number of visits took place, according to the health protocols as they were currently in force.
| 2021 | 2020 | |||
|---|---|---|---|---|
| Number of visits |
Number of people |
Number of visits |
Number of people |
|
| SECONDARY EDUCATION | - | - | 2 | 59 |
| HIGHER EDUCATION | 1 | 7 | 4 | 90 |
| OTHER INSTITUTIONS | 5 | 35 | 1 | 8 |
| TOTAL | 6 | 42 | 7 | 157 |
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
PPA S.A. takes care to eliminate the difficulties faced by people with disabilities in the use of the Cruise and Ferry port facilities and their movement within the passenger port.
Within this concern, the following actions are followed:
The company's planning for the future includes:
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
On 30 January 2020, the World Health Organization (WHO) declared the spread of COVID-19 pandemic a "public health emergency of international concern", while on March 11, 2020 it was declared by WHO as a pandemic. Immediately the entire healthcare staff of the country was put on alert and a series of decisions were taken with the main aim being to slow down the spread of the virus while at the same time measures were announced to reduce the impact on social and economic level. The evolution of the COVID-19 pandemic, combined with the restrictive measures taken to address it, has had a negative economic impact worldwide and has inevitably affected and will continue to affect the national economy.
The duration and severity of the effects, although they cannot be estimated reliably at present, will largely depend on:
• the decisions of bank supervisory authorities for providing liquidity and support to businesses and households.
In this difficult time and within the above-described framework that led to unprecedented measures (eg. lockdown) in almost all over the world, PPA SA, with responsibility and commitment to its corporate values, actively participated in the effort of the Greek state to limit the spread of coronavirus (COVID-19) and in the protection of the public and private health, successfully implementing a set of targeted measures to combat its transmission, in accordance with the decisions and recommendations of the Ministry of Health and National Public Health Organization, in order to ensure the health and safety of employees, customers and users of the port, who in combination are a key pillar of business development.
In particular, since the outbreak of the pandemic in Greece, the Company has implemented those policies that were deemed necessary and appropriate, in order to ensure its business continuity, its smooth operation and the reduction of negative consequences to the smallest possible extent, through the:
➢ Ongoing market research and procurement of personal protective equipment to maintain sufficient stock for employees
➢ Supply a sufficient number of laptops with the appropriate software, allowing remote access to corporate resources to employees working from home. In total the Company procured, configured and distributed 164 laptops to office personnel.
➢ Adoption of teleworking for employees who can perform their work from home, so as to achieve overcrowding and avoid close contacts (In total 247 employees had followed the "Work from Home" practice with respective creation of equal amount of VPN accounts, for totally 10,682 days during the period from 1/1/2021 έως και 31/12/2021).
➢ Taking care of those employees belonging to vulnerable groups, in accordance with the instructions of the NPHO (EODY) and the Occupational Doctor (A total of 4 employees belonging to the "vulnerable groups" due to health problems did not come to work during the period from 1/1/2021 έως και 30/6/2021.
➢ Granting "special purpose leave" to employees, in accordance with the instructions of the State Authorities (In total, 58 employees used the "Special Purpose Leave" practice for totally 1,444 days from 1/1/2021 έως και 31/12/2021).
➢ Encouraging business partners for the use of electronic services
➢ Maintenance of communication channel and constant updating by the competent authorities of the State and the Port (NPHO-EODY / Piraeus Port Health Services / Hellenic Coast Guard).
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
➢ Stay in their home for 14 days, for those employees who returned from abroad, according to the instructions of the NPHO (EODY).
as well as increasing the frequency of cleaning and disinfecting workplaces where staff regularly move such as:
➢ Installation of antiseptic hand bases at Cruise Terminal and PPA's buses, as well as at key points of the company's buildings.
➢ Installation of floor marking and plexiglass protective dividers in the passenger Terminals, in platform scales and shuttle buses.
➢ Reproducing of informational videos of NPHO (EODY) at the passenger stations of Cruise Terminal and at the company's HQs.
➢ Installation of A4 size laminated posters with NPHO (EODY) guidelines regarding compliance with hygiene rules in prominent areas of the company's premises.
➢ Informing of maritime agencies about the actions to be taken by crews, in case of close contacting with PPA's employees. (Wearing masks etc.)
➢ Equipment of the company's ambulances with the necessary materials to be ready to deal with a potential incident.
➢ Creation of an Action Plan for a suspected case during work.
➢ Sending of informative messages via e-mail and SMS to all employees of the company, regarding preventive measures, in accordance with the instructions of NPHO (EODY).
➢ Supply of materials and personal protective equipment (antiseptic gels, FFP2 masks, surgical masks, gloves etc.) and distribution to all staff, considering their job position.
➢ Continuous communication of the Occupational Doctor with employees presenting symptoms, in order to provide medical instructions.
In addition to those mentioned in the BoD report on working safety issues, it is noted that the Company recognizes the importance of providing safe conditions and workplaces to the staff and safe conditions of travel - circulation of all involved, tradesmen, passengers etc.
All areas of the port are regularly inspected to ensure that employees comply with health and safety rules of the company and the instructions of those responsible.
PPA S.A. also monitors and controls the compliance of third parties (contractors) with the Occupational Health and Safety legislation, requiring health and safety plans before and during the implementation of technical projects.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
For this purpose, PPA SA employs two (2) safety engineers and an doctor, who submit relevant reports to the Company's Management in accordance with Law 3850/2010. It has been also set up an Employees' Health and Safety Committee (EYAE), which consists of elected employees, has all the responsibilities deriving from the current legislation and meets in the presence of the employer's representatives at regular intervals.
Potential accidents are recorded and investigated, and corrective actions are planned in order not to be repeated.
Additionally, at high-risk areas (Container Terminal and Perama Shipyards Zone) the Company provides two ambulances with trained rescue personnel that are available 24/7.
The Company conducted training in fire safety and workplace evacuation, with the participation of thirty (30) employees.
The following table illustrates the evolution in the number of accidents, the loss of working days and the number of transits from the Container Terminal premises of the Company.
| 2020 | 2021 | |
|---|---|---|
| Number of accidents (totally declared) of which: | 29 | 28 |
| • Labor |
18 | 11 |
| • Pathologic / on arrival |
11 | 17 |
| 10 accidents / | 4 accidents / 92 | |
| Number of accidents with loss of working days based on the | 872 working | working days |
| ESAW methodology used by ELSTAT * | days lost | lost |
| Ambulance services (Container Terminal) | 107 | 91 |
| Ambulance services (Ship Repair Zone) | 12 | 22 |
Although the total number of reported accidents decreased by just 1 accident, there was a large reduction of 39% (from 18 to 11) in labor accidents that occurred during work.
Following the aforementioned in the BoD Management Report and in accordance with the applicable regulations, parental leave is granted for employees in order to attend school performances of children as well as sick leave is granted. Details are shown in the below tables.
| 2021 | 2020 | |
|---|---|---|
| Number of beneficiaries for parental leave | 148 | 138 |
| Number of parental leaves given | 547 | 366 |
The number of employees who are entitled to parental leaves for attending their children school performance increased (by 7.25%) from 138 employees in 2020 to 148 employees in 2021, also the total number of parental leave granted between 2020 and 2021 increased by 49.45%, from 366 to 547.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
| 2021 | 2020 | |||
|---|---|---|---|---|
| Number of | Number of | Number of sick | ||
| employees who | Number of sick days leave granted |
employees who | days leave | |
| have taken sick | have taken sick | granted | ||
| leave | leave | |||
| 547 | 12,153 | 462 | 10,821 |
With regard to the granting of sick leave, it is noted that the number of employees who have used sick leave increased by almost 18.40% between 2020 and 2021 (from 462 to 547 respectively) and the total number of sick leave days increased comparatively by 12.30% (from 10,821 days in 2020 compared to 12,153 in 2021).
In addition to those mentioned in the BoD Management Report, on staff education and training programs, the table below provides detailed information on educational programs that took place in 2020 and the participation of employees in them.
| 2021 | 2020 | |
|---|---|---|
| Percentage of trained employees | 32.38 % | 23.5 % |
| Training man hours | 1,930 | 3,196 |
| Total training cost (€) | 48,420.00 € | 23,326.00 € |
From the above analysis it follows that given the situation throughout 2021, PPA has implemented also in the field of education, measures in accordance with the decisions and recommendations of the Ministry of Health and the ESA, with a view to ensuring the health and safety of workers.
In 2021, the number of trainings and participants increased significantly compared to 2020, since all trainings were implemented by dintance (Web Seminar).
Company's objective remains to increase the number of training for coming years.
In PPA S.A. are active total four (4) primary Assocaitions (Association of Permanent Employees, Union of Technicians and Operators, Association of Dockworkers, Association of Supervisors & Foremen) and one (1) secondary Association (Federation of Permanent Port Employees of Greece). The Management of the Company is in close collaboration with employee representatives in order to achieve the proper functioning of its services and to promote the common interest of the Company and its employees.
Under current operational collective labor contracts, the Company offers to its staff additional social benefits. In particular, the Company grants interest –free loans to its employees up to amount of 3.000 € to cover exceptional and unforeseen needs, wedding assistance, creches and camps costs for the children of staff, prizes for the children of staff with excellent school performance, donation of gifts and voluntary blood donation leaves, under the conditions that apply for all employees without any discrimination.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
In particular for 2021, there were provided:
The Company being in compliance with the European General Data Protection Regulation 2016/679 which came into force on 25 May 2018 establishing a single legal framework across the EU for the protection of personal data, as it is demonstrating through the year's great dedication and sensitivity regarding the management and protection of personal data, takes all necessary steps to ensure that its entire staff is sensitized and constantly working to be compliant with the New GDPR Regulation.
The company recognizes that transparency and accountability are the basis for a trustworthy collaboration with its customers, whereas legitimate and sensitive handling of personal data is equally a critical issue to the company and its employees.
For any information or questions regarding the protection of Personal Data or the exercise of legal rights in relation to Personal Data you can contact us at [email protected].
According to the approved Regulation for the award of works, Services, and Procurement, the Company implements control procedures, under penalty of exclusion, through the obligation to submit certificates issued by the local competent judicial authority:
a) participation in criminal organizations within the meaning of Article 2 of Council Framework Decision 2008/841/JHA;
b) bribery within the meaning of Article 2(1) of Council Framework Decision 2003/568/JHA;
c) fraud within the meaning of Article 1 of the Convention to protect the financial interests of the European Communities;
d) terrorism or terrorism – related crimes as defined in Articles 1 & 3 of Council Framework Decision 2002/475/JHA;
e) money laundering within the meaning of Article 1 of the Directive 2005/60/EC;
f) child labour and other offences concerning trafficking in human beings, as defined in Article 2 of the Directive 2011/36/ΕC;
g) embezzlement, fraud, extortion, forgery, perjury, bribery, fraudulent deliberate bankruptcy, according to the Greek Penal Code or crimes similar in their specific aspects to the above, provided for in foreign legal orders.
According to the article 17.4 of the General Staff Regulation (GSR) are clearly considered (among others) as disciplinary offences the following:
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Also according to the article 17.6 of the GSR temporary or permanent suspension (dismissal) may be imposed (among others) in respect of the following offence:
Through the PPA S.A. Internal Complaint Process (ICP) as described in the Code of Conduct, provides the chance for complaints submission on issues related to Fraud and Corruption / Bribery.
The aim of the Contracts and Subconcessions Regulations (which entered into force by the CEO's Decision No. 833/04-10-2019) is to create a stable reference framework for the Company and its related traders, in the regulated sectors. This Regulation is more simplified in fulfilling the procurement process. Furthermore, backbone of the Regulation is primarily to serve the interests of the Company and the strict compliance towards obligations that arise from Concession Agreement, through the proper selection of the most appropriate counterparty, in financial terms and in terms of adequacy.
Furthermore, the Regulation sets the general award procedures, with reference to the respective Declaration and context for signing a contract for the case when specific setting of the award conditions. This option provides greater flexibility and simplification of procedures, which may contribute decisively to the fulfillment of the Mandatory Investment Program completion timelines.
With the application of Contracts and Subconcessions Regulations, Company fulfills its obligation to respect the principles of transparency, publicity and equal treatment in the awarding of project execution, studies and services, as reflected in the provision of art. 8 par. 2 N. 4404/2016.
For its procurement needs, PPA S.A., pursuant to the Contracts and Subconcessions Regulations (CEO's Decision No. 833/04-10-2019) fulfills the statutory obligation to observe the principles of transparency, publicity and equal treatment in the award of works, studies and services, as reflected in the relevant provision of Law 4404/2016.
In the year 2021, PPA S.A. conducted 82 tenders with a total value of € 57.3 million, with a sufficient average number of bidders (an average of 3 - 4 participants per tender).
The Company's main suppliers come from both the National and International markets. The rules of cooperation between them are in line with the prevailing market conditions. There are no overdue debts to Suppliers or other breaches in relation to the contracts that have been signed.
PPA S.A. published and completed tender procedure for the creation of an approved Suppliers Register in the categories of Projects, Implementation of European programs and Tourist services for the Administration dep. The vendor registers created following open tender procedures for each category with specific criteria and will be evaluated regularly by Management. Suppliers will have specific rights and obligations.
Regarding the process of creating the Contractors' Register, Procurement Department has contacted operational Departments to investigate the needs, the criteria, the prerequisites and the way they are evaluated.
The Company provides services to certain related parties in the normal course of business. The Company's transactions and account balances with related companies are as follows:
| Related party | Relation with the Company | Year ended | Sales to related parties |
Purchases from related parties |
|---|---|---|---|---|
| 31.12.2021 | 78,206,476.27 | 73,513.45 | ||
| PIRAEUS CONTAINER TERMINAL S.A | Related Party | 31.12.2020 | 72,306,665.57 | 80,347.77 |
| COSCO SHIPPING LINES GREECE S.A | Related Party | 31.12.2021 31.12.2020 |
44,934.22 370,355.24 |
9,112.93 56,323.85 |
| PCDC A.E. | Related Party | 31.12.2021 31.12.2020 |
36,555.59 35,941.94 |
- 3,240.00 |
| CHINA COSCO SHIPPING CORPORATION LIMITED | Related Party | 31.12.2021 31.12.2020 |
- 124,585.75 |
- - |
| COSCO SHIPPING DEVELOPMENT CO. LTD | Related Party | 31.12.2021 31.12.2020 |
27,300.00 78,050.00 |
- - |
| 31.12.2021 | 9,244.91 | |||
| COSCO SHIPPING TECHNOLOGY Co LTD | Related Party | 31.12.2020 | - - |
58,684.08 |
| COSCO (HONG KONG) INSURANCE BROKERS L.T.D. | Related Party | 31.12.2021 31.12.2020 |
- - |
- 509,727.44 596,748.58 |
| COSCO SHIPPING GLOBAL EXH | Related Party | 31.12.2021 31.12.2020 |
- - |
106,346.61 35,790.00 |
| COSCO SHIPPING TECHNOLOGY (BEIJING) | Related Party | 31.12.2021 31.12.2020 |
- - |
83,570.51 - |
| COSCO SHIPPING PORTS LIMITED | Related Party | 31.12.2021 31.12.2020 |
- - |
95,145.41 - |
| 31.12.2021 | 78,315,266.08 | 886,661.26 | ||
| 31.12.2020 | 72,915,598.50 | 831,134.28 | ||
| Related Party | Relation with the Company | Year ended | Amounts due from related parties |
Amounts due to related parties |
| PIRAEUS CONTAINER TERMINAL S.A | Related Party | 31.12.2021 31.12.2020 |
2,635,950.59 1,992,540.54 |
7,776.48 4,526.33 |
| COSCO SHIPPING LINES GREECE S.A. | Related Party | 31.12.2021 31.12.2020 |
- 382,088.08 |
35,164.30 570.40 |
| PCDC A.E. | Related Party | 31.12.2021 31.12.2020 |
- 316.74 |
- - |
| COSCO (HONG KONG) INSURANCE BROKERS L.T.D. | Related Party | 31.12.2021 31.12.2020 |
- - |
- 478,094.95 |
| COSCO SHIPPING DEVELOPMENT CO. LTD | Related Party | 31.12.2021 31.12.2020 |
181.91 156.91 |
- - |
| 31.12.2021 31.12.2020 |
2,636,132.50 2,375,102.27 |
42,940.78 483,191.68 |
The revenues of € 70,097,734.45 (2020: € 66,493,707.34) (Note 23) from Piraeus Container Terminal S.A. (PCT S.A.) are related to the fixed and variable revenue from the concession agreement (PIER II & III) and revenues of € 8,108,741.83 (2020: € 5,812,958.23) related to mooring and loading/uploading. Besides, PPA in April 2020, signed a contract about the provision of project management services with PCT S.A. for the business operation of Pier I of PPA S.A. On December 29, 2020, the letter of guarantee from PCT S.A. with the amount € 42.0 million, reduced by 50% to € 21.0 million in previous year, and the letter of guarantee with the amount € 475,000.00, reduced from € 950,000.00 by 50% in previous year, were returned to PCT S.A. On the same date, a new letter of guarantee of € 663,000.00 regarding the rest of the construction of the west side of Pier III for the construction works of Pier II and III was received (Note 21).
The transactions with COSCO SHIPPING LINES GREECE S.A. relate to ship services.
The transactions with COSCO SHIPPING DEVELOPMENT CO. LTD are related to ship repair services for their vessels.
The transactions with COSCO SHIPPING GLOBAL EXH relate to exhibition expenses.
The transaction with COSCO SHIPPING TECHNOLOGY (Beijing) relates to software licence renewal.
The transaction with COSCO (HONG KONG) INSURANCE BROKERS L.T.D. of the current and the previous period relates to the insurance coverage of PPA S.A. regarding third party liability, employer' s liability, property and business interruption and directors and officers liability, according to article 17 of the Concession Agreement (Law 4404/2016).
The transaction with CHINA COSCO SHIPPING CORPORATION LIMITED of the previous year relates to its participation to Company's advertising expenses.
The transaction with COSCO SHIPPING PORTS LIMITED is related to software for tax interconnection services with the SAP software.
The transaction with COSCO SHIPPING TECHNOLOGY Co. LTD of the previous year relates to software support costs.
Board of Directors Members Remuneration: During the year 2021, remuneration and attendance costs, amounting to € 889,082.91 (December 31,2020: € 910,855.30) were paid to the Board of Directors members. Furthermore during the year ended December 31, 2021 emoluments of € 554,857.42 (December 31, 2020: € 557,368.68) were paid to Managers / Directors for services rendered.
The Extraordinary General Meeting of the Company's shareholders on September 23, 2019 approved the long-term incentive bonus plan, which is cash settled of a certain number of Units. Beneficiaries of the program are members of the Board of Directors, senior executives and other key management and business executives who have a significant influence on the performance and uninterrupted operation of the Company (Note 28).
The Company, for the preparation of the Annual Financial Report of December 31, 2021, has adopted the going concern basis. For the application of this principle, the Company took into account the current financial developments as well as the risks arising from the financial environment and made estimates for the shaping, in the near future, of the trends and the economic environment in which it operates. The main factors that can affect the implementation of this principle are mainly related to the economic environment in Greece and internationally, tourism and the consequences of the pandemic (COVID-19) in the Greek economy and internationally.
As part of the consideration of whether to adopt the going concern basis in preparing the Annual Financial Report of December 31 2021, management reviewed a range of scenarios and forecasts. The assumptions have been modelled on the estimated potential impact and plausible negative scenarios, along with the Company's proposed responses as a result of the COVID-19 pandemic. Τhe Management, analyzing the financial statements of 31 December, 2021 and in comparison with the financial statements of the previous year in combination with the evolution of the vaccination of the general population in Greece and internationally, foresees a reversal of the climate and considers that even in the case of negative scenarios, these will not affect the results and the financial position of the Company to the extent that they were affected in previous years. The management also believes that the Company's strong balance sheet and liquidity position, its operation in several segments, the strong and dynamic management and the experienced human resources will allow the Company to successfully overcome this period of uncertainty.
Accordingly, and having reassessed the principal risks, the members of Board of Directors continue to adopt the going concern basis of accounting in preparing the Annual Financial Report of December 31, 2021 and have not identified any material uncertainties to the Company's ability to continue trading as a going concern over a period of at least 12 months from the date of approval of these financial statements.
Law 4706/2020 (Government Gazette 136 / Α / 17-7-2020), on Corporate Governance of public limited companies, modern capital market, which incorporated in Greek legislation the Directive (EU) 2017/828 of the European Parliament and Council, measures to implement Regulation (EU) 2017/1131 and other provisions, as well as Decision 2/905 / 3.3.2021 of the Board of Directors of the Hellenic Capital Market Commission establish the obligation to adopt and implement the Corporate Governance Code, which has been prepared by a body of known prestige.
The Company, in compliance with the requirements and regulations of the said law, implements with a relevant decision of its Board of Directors the Code of Corporate Governance, of the Hellenic Corporate Governance Council issued in June 2021, the text of which is available at website of the Company at the following link: https://www.esed.org.gr/en/code-listed.
The implementation of this Code aims at the continuous improvement of the corporate institutional framework and the wider business environment, as well as the improvement of the Company's competitiveness as a whole.
The Company fully complies with the provisions of the relevant Greek legislation, rules and regulations and internal corporate values for the development of corporate governance principles it applies and has adapted to those defined by the existing institutional framework of corporate governance.
As mentioned above, following a Board of Directors decision and in accordance with article 17 of law 4706/2020, it implements and adopts the Hellenic Corporate Governance Code (HCGC, June 2021) of the Hellenic Corporate Governance Council (HCGC). HCGC 2021 of HCGC is available at the following link: https://www.esed.org.gr/web/guest/code-listed.
The Company has not adopted some specific practices of the Code that are specifically mentioned below but remains faithful to its commitment to take all the necessary actions for the implementation of the provisions of Law 4706/2020:
The individual evaluation process regarding the effective fulfillment of the duties of the BoD members was not considered necessary at this time as the individual performance of the members and the BoD as a whole will be evaluated by the forthcoming Ordinary General Assembly, at the same time with the evaluation of annual financial statements of the Company and the other BoD reports provided by the current legislation and in combination with the results of the year and the general course of the Company's operations (Special practice of Code 1.13, 3.3.3, 3.3.4 and 3.3.12).
ΙΙ. Description of the main features of the Company's internal control and risk management systems in relation to the financial reporting process
II.1. The internal control system of the Company covers adequately the control procedures involving risk management and preparation of financial reports.
II.2. In respect of the preparation of financial statements, the Company considers its accounting system adequate for reporting to the Management and external users. The financial statements are prepared in compliance with the International Financial Reporting Standards, as adopted by the European Union for reporting purposes to the administration, and also for the purpose of publication in line with the applicable regulations (hereinafter, "IFRS"). All reports include the data of the current period, compared to the respective data of the Budget as approved by the Board of Directors, and to the data of the respective period of the year before the report. All published interim and annual financial statements include all necessary information and disclosures in compliance with the IFRS, are reviewed by the Audit Committee and are approved in their entirety by the Board of Directors.
II.3. Safeguards are implemented with respect to: a) supervision and approval of all important transactions through the structural hierarchy of the Company; b) monitoring of financial figures and risk evaluation as for the reliability of the financial statements; c) fraud prevention and tracking; and d) protection of data provided by information systems.
II.4. The internal reports to the Management and the reports required from the provisions of the legislation and by the supervisory authorities are prepared by the Financial Management Department, which is staffed with adequate and experienced executives to this effect.
II.5. The statutory auditors of the Company PRICEWATERHOUSE COOPERS S.A. (Greek AM SOEL 113), i.e. the statutory audit firm of financial statements of the Company for the year ended on 31 December 2021, are not related to the Company or to any persons having supervisory responsibilities over the Company's financial reporting in ways which could be considered as affecting their independence as of the date of this report. Therefore, they remain independent within the meaning of Article 21 of Law 4449/2017.
II.6. Provision of non-audited services by statutory Auditors: The statutory auditors do not offer to the Company non-audit services which are prohibited, as per the provisions article 5 of Regulation (EU) 537/2014 of the European Parliament and of the Council and of Law 4449/2017, that are relevant to the audit of the financial statements in Greece.
The non-audit services that have been provided to the Company, during the year ended as at 31 December 2021, are disclosed in the note 24 to the financial statements.
III. Reference to the information required by points (c), (d), (f), (h) and (i) of paragraph 1 of article 10 of the Directive 2004/25/EC
The above information is included in another part of the Management Report, i.e. in the Explanatory Report of the Board of Directors according to article 4, par. 7 and 8 of Law 3556/2007.
IV. Composition and operation of the administrative, management and supervisory bodies of the Company
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The General Assembly of the shareholders of the company is the supreme body of the Company and is entitled to decide on any affair regarding the Company. Its legal resolutions also bind the absent or disagreeing shareholders.
The General Assembly of shareholders is convened by the Board of Directors and meets obligatorily at the seat of the Company or in the region of another municipality within the region where the seat of the company is located, at least once in any corporate fiscal year until the tenth (10th) calendar day of the ninth month at the latest after the end of the corporate financial year. It may also be convened at the region of the Municipality, in which the seat of the Athens Stock Exchange is located.
The General Assembly has a quorum and validly meets on the issues of the daily agenda, provided they are present or represented therein shareholders representing at least one fifth (1/5) of the paid share capital. If no such quorum occurs at the first meeting, a repetitive General Assembly is convened within twenty (20) days from the date of the cancelled meeting, which is convened at least ten (10) days prior to this meeting, unless the procedure of article 9 par. 5 last sentence of these articles of association has been applied. This repetitive General Assembly has quorum and validly meets on the issues of the initial daily agenda, whichever is the part of the paid share capital of the company, which represented in the meeting. The resolutions of the General Assembly are taken upon full majority of the votes represented in the meeting.
Until the election of its Chairman, performed by the same meeting with a simple majority, in the General Assembly chairs the Chairman of the Board of Directors or his/her alternate. The Chairman of the meeting may be assisted by a secretary and a teller, elected in the same way. The Chairman checks if the convocation of the General Assembly follows the normal procedure, the identity and legalization of those present in the meeting, the accuracy of the minutes, administers the discussion, sets the issues on vote and announces the results of the vote.
The discussions and resolutions of the General Assembly are limited to the issues of the daily agenda. The result of the voting is announced by the Chairman of the General Assembly as soon as it is confirmed. The company, under the responsibility of its Board of Directors, publishes in its website the results of the voting within maximum five (5) days from the date of the General Assembly, specifying for each resolution at least the number of shares for which valid votes were given, the percentage of the share capital that is represented by these votes, the total number of valid votes, as well as the number of votes for and against each resolution and the number of the absences.
The Company is managed by the Board of Directors composed by nine (9) to thirteen (13) members (directors), elected by the General Assembly, subject to paragraph 2 below, with absolute majority of the represented votes, for a duty up to five (5) years, which is extended until the expiry of the deadline, within which the next ordinary General Assembly following directly the previous one must be convened and until the adoption of the relevant resolution.
As long as the Hellenic Republic Asset Development Fund S.A. or any global successor or successor by operation of law of the Hellenic Republic Asset Development Fund S.A. (each and collectively, the "FUND") holds at least one million two hundred and fifty thousand (1,250,000) voting shares and less than 10% of the voting shares issued by the Company and subject to the FUND is entitled to appoint one (1) Member pursuant to article 79 of Law 4548/2018 as in force. If the FUND holds at least 10% of the voting shares, the FUND is entitled to appoint 1/3 of the total number of Members of the Board of Directors of the Company.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Should any Director appointed pursuant to paragraph 2 of this article resign or become incapacitated for whatever reason, they shall be replaced by such persons the HRADF shall specify in a pertinent written notice to the Company, with immediate effect.
The directors, shareholders and non-shareholders may always be reelected and are freely revocable.
Member of the Board of Directors may also be a legal person. In this case the legal person is obliged to appoint a natural person for the exercise of the powers of the legal person as member of the Board of Directors. This appointment is subject to publicity according to article 13 of the L.4548/2018. The natural person is jointly and severally liable together with the legal person for the company's management.
The Board of Directors consists of executive, non-executive and independent nonexecutive members.
Executive members are those who deal with the day-to-day management of the Company. The executive members of the Board of Directors, in particular: (a) are responsible for the implementation of the strategy determined by the Board of Directors and (b) consult at regular intervals with the nonexecutive members of the Board of Directors on the most appropriate strategy to be implemented. In situations of crisis or risk, as well as when circumstances require it to take measures that are reasonably expected to significantly affect the Company, such as when decisions are to be made regarding the development of the business and the risks that are expected to affect the financial situation of the Company, the executive members inform the Board of Directors in writing without delay, either jointly or separately, submitting a relevant report with their estimates and proposals.
The non-executive members of the Board of Directors, including the independent nonexecutive members, have, in particular, the following obligations: (a) They monitor and examine the Company's strategy and its implementation, as well as the achievement of its objectives. (b) Ensure effective oversight of executive members, including monitoring and control of their performance. (c) Examine and express views on the proposals submitted by the executive members, based on existing information.
The number of non-executive members of the Board of Directors must not be less than 1/3 of the total number of members, including independent non-executive members.
Independent non-executive members are those members who are elected by the General Assembly, or appointed by the Board of Directors (according to par. 4 of article 9 of Law 4706/20120), who are free from financial, business, family or other relationships of dependency with the Company or with persons related to it, which may influence their decisions and their independent and objective judgment, and meet the additional conditions provided by the relevant legislation (article 9 of Law 4706/2020), including non-executive obstruction assistance and not exceeding the maximum permitted percentage of their participation in the share capital of the Company.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The Board of Directors elects one of the Directors as Chairman and may designate up to two (2) other Directors as Vice Chairmen.
The Chairman of the Board of Directors chairs its meetings and exercises the responsibilities provided by law and the articles of association. When the Chairman is absent or hindered, he shall be replaced by the appointed for this purpose Vice Chairman.
In case the Board of Directors, by way of derogation from par. 1, of article 8 of law 4706/2020 appoints as Chairman one of the executive members of the Board of Directors, it obligatorily appoints a vice-chairman from the non-executive members.
The Board of Directors elects a Member as the Chief Executive Officer of the Company. The Chief Executive Officer and the Chairman may be the same person.
The Board of Directors should meet any time provided by law, the articles of association or required under the needs of the company.
Meetings of the Board of Directors shall convene within the Municipality of the registered office of the Company or alternatively within the prefecture of the Municipality of the registered office of the Athens Exchange. Alternatively, meetings of the BoD may convene in Mainland China or Hong Kong.
The Board of Directors may duly meet at another place out of the seat of the company, located either in Greece or abroad, provided that in this meeting all the members of the BoD are present or represented, and no member objects to the execution of the meeting and to the adoption of resolutions.
The invitation to the members of the Board of Directors may provide that the meeting of the Board of Directors will take place through conference call for some or for all members. In this case, the invitation addressed to the members of the Board of Directors includes the necessary information and technical instructions about their participation in the meeting.
The Board of Directors is convened by the Chairman or Vice Chairman who chair its meetings, upon invitation notified to its members at least two (2) working days prior to the meeting, and at least five (5) working days if the meeting is going to be held in a location outside the seat of the company. In the invitation the issues of the daily agenda must be stated clearly, otherwise the adoption of resolutions is permitted only if present or represented are all the members of the Board of Directors and none objects to the adoption of resolutions.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The composition of the Board of the Directors has as follows:
| Name | BoD position | Gender | Number of BoD meetings taken place withing 2021, during the BoD Member term of office |
Percentage of participation in BoD meetings |
Initial date of undertaking of terms office (prior to the current term) |
Date of commencement of term office or re-election |
End of term of office |
|---|---|---|---|---|---|---|---|
| Yu Zenggang | BoD Chairman, Executive Member | М | 10 | 100,0% | 05/06/2019 | 15/07/2021 | 15/07/2022 |
| Zhang Anming | Acting CEO, Executive Member | М | 10 | 100.0% | 24/07/2020 | 15/07/2021 | 15/07/2022 |
| Li Jin | CFO. Executive Member | F | 8 | 100,0% | 15/07/2021 | 15/07/2022 | |
| Zhu Jianhui | BoD Vice Chairman, Non Executive Member |
М | 10 10 | 100.0% | 10/08/2016 | 15/07/2021 | 15/07/2022 |
| Feng Boming | Non Executive Member | М | 10 10 | 70.0% | 10/08/2016 | 15/07/2021 | 15/07/2022 |
| Yu Tao | Non Executive Member | F | $\overline{2}$ | 100,0% | 16/11/2021 | 15/07/2022 | |
| Kwong Che Keung Gordon |
Independent, Non Executive Member |
М | 10 | 100.0% | 10/08/2016 | 15/07/2021 | 15/07/2022 |
| IP Sing Chi | Independent, Non Executive Member |
М | 10 10 | 100,0% | 10/08/2016 | 15/07/2021 | 15/07/2022 |
| Arvanitis Nikolaos |
Independent, Non Executive Member |
М | 10 | 100.0% | 01/04/2016 | 15/07/2021 | 15/07/2022 |
| Moralis Ioannis | Independent, Non Executive Member |
М | 9 | 66,7% | 13/10/2014 | 16/11/2021 | 15/07/2022 |
| Politis Dimitrios | Non Executive Member | М | 5 | 100,0% | 31/08/2021 | 15/07/2022 | |
| Karamaneas Charalampis |
Non Executive Member | М | 2 | 100.0% | 23/08/2017 | 15/07/2021 | |
| Papapostolou Apostolos |
Non Executive Member | М | 7 | 100,0% | 29/06/2020 | 15/07/2021 | 06/10/2021 |
| Ioannidou Leto | Non Executive Member | F | 3 | 100.0% | 15/07/2021 | 21/08/2021 | |
With a solemn declaration, the BoD members informed twice, July and December 2021, about their other professional commitments, that they do not participate in more than three (3) Boards of Directors of listed companies.
On January 4, 2021, PPA S.A. announced the appointment of the non-executive member of the Board of Directors Mr. ZHU Jianhui, as Vice Chairman of the BoD.
The General Assembly of July 15, 2021 approved the election of Ms. LI Jin, as a new member of the Board of Directors.
On September 10, 2021, the BoD decided the replacement of the late Ioannidou Lito, non-executive member of the BoD of PPA S.A., representative of HRADF, for the rest of her term, by Mr. Dimitris Politis.
On October 25, 2021, the Board of Directors decided to accept the resignations of the members of the Board of Directors, Mr. Ioannis Moralis and Mr. Apostolos Papapostolou (representatives of HRADF).The
Extraordinary General Assembly of November 16, 2021 approved the election of Mr. Moralis Ioannis as independent member and Ms. YU Tao as member of the Board of Directors.
The term of the above Board of Directors expires on July 15, 2022.
CVs of the members of the Board of Directors follow, which can be also found on the web page of the Company, at the link https://www.olp.gr/en/about-us/corporate-governance/board-of-directors.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Mr. Yu Zenggang is Executive Vice President and Member of China COSCO SHIPPING Corporation Limited. He started his career in August 1984, and served as the Chief Representative of the Japan Representative Office of Shanghai Shipping Bureau, BoD Member and President of Shanghai Haixing Shipping (Japan) Co. Ltd., Deputy General Manager, General Manager of the Development Division of China Shipping (Group) Company, Executive Vice President of China Shipping (North America) Holding Co., Ltd., President of China Shipping (Europe) Holding GmbH, General Manager of the President Office of China Shipping (Group) Company, Director of BOD Office and General Office, Executive Vice President and BOD Secretary of China Shipping (Group) Company. He has over 35 years' working experience in shipping industry, and has abundant expertise in corporate management, corporate governance, overseas port industry development, international operation, and listed company management. Mr. Yu Zenggang graduated from Wuhan University of Technology with a Bachelor's Degree of engineering science in 1984 and obtained the Master's Degree in 2012 from CEIBS (China Europe International Business School).
Mr. Zhang Anming has over 25 years of work experience in the shipping industry. Mr. Zhang has extensive experience in container shipping and management. He has served (period 1996-2002 and 2009-2012) from different financial managerial positions COSCO Container Lines Ltd, while he had international working experience from serving as Deputy General Manager of COSCO Container Lines in Italy (period 2002-2008). In 2012 he appointed as Deputy General Manager and in 2016 Managing Director of Piraeus Container Terminal SA. He graduated from Peking University, Guanghua School of Finance and Management.
Mr. Zhu Jianhui possesses extensive professional knowledge in ocean shipping and logistics management and also has rich experience in corporate operation and management. Mr. Zhu was graduated from Shanghai Maritime College (now known as Shanghai Maritime University) and obtained a Master's degree. He is a senior economist.
Mr. FENG served as Manager of the Commercial Section of the Ministry of Trade Protection of COSCO Container Lines Co., Ltd., General Manager of COSCO Container Hong Kong Mercury Co., Ltd., General Manager of the Management and Administration Department of COSCO Holdings (Hong Kong) Co., Ltd., General Manager of COSCO International Freight (Wuhan) Co., Ltd./COSCO Logistics (Wuhan) Co., Ltd. and Supervisor of the Strategic Management Implementation Office of China Ocean Shipping Company Limited/COSCO SHIPPING Holdings, General Manager of the Strategic and Corporate Management Department of China COSCO SHIPPING Corporation Limited, Non-executive BoD member of COSCO SHIPPING Holdings, Non-executive BoD member of COSCO SHIPPING Energy Transportation Co. and COSCO SHIPPING Development Co., Ltd., and Director of COSCO SHIPPING Bulk Co., Ltd. Mr. FENG is the Chairman of the Executive Committee and the Investment and Strategic Planning Committee, and a member of the Nomination Committee, the Remuneration Committee and the Environmental, Social and Governance Committee of COSCO SHIPPING Ports Limited. Mr. FENG has over 25 years of work experience in the shipping industry and has extensive experience in ports management and operation, enterprise strategy management, business management and container shipping management. Mr. FENG is an economist and holds a Master of Business Administration degree from The University of Hong Kong.
Ms. LI serves since May 2020 till today as a Deputy Chief Executive Officer and Chief Financial Officer of PPA SA. Ms. LI has over 25 years' professional experience and throughout her career professional served COSCO Ocean Shipping, China COSCO Holding and COSCO SHIPPING in various Financial Managerial positions up to the General Manager of Finance Division level and she has international working experience by serving COSCO SHIPPING Group, In Oceania and Europe. Ms. LI got the senior accountant qualification certificate and senior economist qualification certificate in 2008, and became a Certified management accountant in 2015. Ms. LI participated in "the National Accounting Leading Talents training project" which was organized by Ministry of Finance of the People's Republic of China from 2012 to 2019 and in "the special training course for international talents" which was organized by China COSCO Shipping Group in 2019. Ms. LI graduated from Beijing Vocational College of Finance and Commerce and holds a bachelor's degree in International Credit and Investment and a Master's Degree in Finance from Beijing Central University of Finance and Economics.
Mr.Kwong has been the Independent Non-executive Director of the COSCO SHIPPING INTERNATIONAL (HONG KONG) CO., LTD since July 2020. Mr. Kwong is also independent nonexecutive director of a number of listed companies in Hong Kong, namely, Agile Group Holdings Limited, Chow Tai Fook Jewellery Group Limited, FSE Lifestyle Services Group Limited, Henderson Investment Limited, Henderson Land Development Company Limited and NWS Holdings Limited. Mr. Kwong graduated from The University of Hong Kong with a bachelor's degree in social sciences in 1972 and is a fellow member of the Institute of Chartered Accountants in England and Wales and the Hong Kong Institute of Certified Public Accountants respectively. Mr. Kwong was a partner of international accounting firms from 1984 to 1998 and an independent member of the Hong Kong Stock Exchange Council from 1992 to 1997, during which he had also served as Chairman of both the Listing Committee and the Compliance Committee of the Hong Kong Stock Exchange. He has over 40 years of experience in accounting and auditing, as well as long experience in port industry.
Mr. Ip Sing Chi is the Group Managing Director of Hutchison Port Holdings Limited and the chairman of Yantian International Container Terminals Co., Ltd. He is also an executive director of Hutchison Port Holdings Management Pte. Limited (the Trustee-Manager of Hutchison Port Holdings Trust, listed in Singapore, stock code NS8U), an outside director of Hyundai Merchant Marine Co., Ltd. (listed in Korea), an independent non-executive director of COSCO Pacific Limited (listed in Hong Kong) and a nonindependent non-executive director of Westports Holdings Berhad (listed in Malaysia). Mr. Ip was the founding chairman (in 2000-2001) of the Hong Kong Container Terminal Operators Association Limited. Mr. Ip was a non-executive director of Tradelink Electronic Commerce Limited (listed in Hong Kong). Mr. Ip has over 30 years of experience in the maritime industry, and holds a Bachelor of Arts degree.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
He studied and participated in seminars in the Maritime Economics, in the Management and Organization of Shipping Companies and in Combined Transport. He has been graduated from BCA College of Athens, London School of Foreign Trade and City of London Polytechnic. He started his career in 1980 in London at FENTON STEAMSHIP CO, a subsidiary of Hellenic Lines LTD, and continued in Top Management positions in Piraeus at ZIM HELLAS SA 1984-2010 and at VISTA MARITIME & LOGISTICS LTD since 2010.
He has participated since April 2000, as an elected member of the BoD of the International Maritime Union, (an institution representing the agencies of international shipping companies in Greece) and was elected President of the BoD for two consecutive terms Apr. 2006 - Mar- 2012. In June 2013 the International Maritime Union BoD unanimously named him as Honorary President. Due to his institutional role as President of the International Maritime Union, he participated in working committees and meetings on issues related to the Port Industry, Shipping Policy, Customs and Regulation Issues, in collaboration with the Ministry of Merchant Shipping & Island Policy, the General Secretariat of Ports Policy and Maritime Investments, the PPA SA and other Port Organizations, the PCT SA, the Customs Administration. He has participated in many national and international conferences on port industry development, liner shipping services, combined transport and supply chain & Logistics infrastructure. His articles and interviews have been published in many magazines, newspapers and media both in Greece and abroad.
Ms. Yu Tao is economist (graduated from University of International Business and Economics) and she also holds a Master degree in Business Administration (Guanghua School of Management Peking University), while she has significant experience in the following areas:
Ms. YU Tao has also served in various management positions (Deputy Chief Executive Officer) at COSCO Logistics Co., COSCO Container Lines Co., and COSCO SHIPPING Lines Co.
Mr. Moralis Ioannis studied at the finance department of the University of Piraeus. Son of the late Minister Petros Moralis was always interest in citizenship and politics but without having actively joined a political party. He works since the age of 22 years old. For more than 20 years he was engaged in Piraeus both as a freelancer in the field of Sports Marketing and communication, as well as the strain Olympiacos FC having taken major positions of responsibility. In 2011 he was appointed Vice President and General Manager of Olympiacos FC. In 2012 he was elected Chairman of the Super League. In 2014 and in 2019 he was elected Mayor of Piraeus.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Dimitris Politis is a graduate of the American College of Greece and holds an MBA in International Business & Export Management from City University Business School in London, as well as various professional certifications. Since 1993, he has held positions of responsibility at international financial organizations. He began his career at HSBC Bank PLC, initially in Athens and then in London, in the Sector of Investment Banking, covering Greece and the wider region of Southeast Europe and the Middle East. He returned to Athens in 2001 as head of Credit Commercial de France, and in 2003 he returned the HSBC Bank plc Greece as Head of Corporate & Institutional Banking. From 2012 to September 2020, he worked at Credit Suisse AG, based in Zurich, as head of Wealth Management UHNWI for Greece and Cyprus while in October 2020 he took on the same role at EFG Bank AG, based in Zurich. Mr. Politis is highly experienced in attracting and managing investments in strategic sectors of the economy and has close professional relationships with international institutional and private investors.
Mr. Angelos Karakostas joined COSCO SHIPPING Lines (Greece) S.A. in 1997 as General Manager. In 2009, he was appointed Deputy General Manager of the Piraeus Container Station (PCT SA). In August 2016, he took over the duties of Deputy CEO of the Port of Piraeus SA.
In December 2017, he was elected President of the Hellenic Ports Association (E.LIM.E).
He holds a degree in Mathematics and a postgraduate degree in Business Research from the University of Patras. He holds an MBA and an MSc in Management from Teeside University of the United Kingdom.
Captain Weng Lin has three decades work experience in the shipping industry. He entered COSCO family as Captain for Shanghai Ocean Shipping Co Ltd (1984-1997) and since then he has served COSCO Europe, COSCO Container Lines and COSCO SHIPPING Lines in upper managerial positions for over 20 years in Shanghai and Hamburg.Today he is a Senior Specialist in Global Maritime Operations Center of COSCO SHIPPING Lines Co (since 2017) and a Deputy CEO in Piraeus Port Authority (since 2018).He holds a University Degree in and an MSc in Business Administration from Shanghai Maritime University.
From the above Members of the Board and Company Executives Mr. Nikolaos Arvanitis, Independent Board Member on 31/12/2021 held 500 shares of PPA SA and Mr. Angelos Karakostas on 31/12/2021 held 1559 shares of PPA SA.
For the fiscal year 01.01.2021-31.12.2021, the compensations paid to the Board of Directors members are those provided in the current Remuneration Policy and as has been approved by General Assembly of Shareholders decision (gross annual compensation for each Board of Directors member of the amount of € 40,000.00. It is to be noted that in 2021, the Company prepared the members of the Board of Directors remuneration report for fiscal year 01.01.2020-31.12.2020 in accordance with article 112 of Law 4548/2018. The remuneration report was discussed at the Regular General Assembly of the Company on 15.07.2021, which was attended by shareholders representing 82.36% of the share capital, while the percentage of "FOR" votes amounted to 92.79% of the shareholders present. The remuneration report for the fiscal year 01.01.2020-31.12.2020 is available on the Company's website: https://www.olp.gr/en/about-us/corporate-governance/board-of-directors
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The Administration Board consists of the Chairman of the Board of Directors, the CEO, the Deputies to the CEO, the Assistants to the CEO and the Senior Consultants, whoever they are each time. The composition of the Administration Board may be extended by decision of the Board of Directors or of the Chairman of the Board of Directors.
Upon invitation by the Chairman of the Board of Directors, to the meetings of the Administration Board may attend and participate, without the right to vote, external Advisors of the Company and the each time responsible managers or acting managers of departments of the Company, for matters related to their responsibilities.
IV.4. Audit Committee
The Audit Committee operates in accordance with the provisions of article 44 of L.4449/2017. It is a Committee of the Board of Directors and is composed of three (3) non-executive members of the Board of Directors, of which two (2) are independent under article 9 of Law 4706/2020, which were appointed by the BoD meeting that took place on 16.07.2021.
Until 15.07.2021, the Audit Committee's composition was as follows:
Kwong Che Keung Gordon, Board of Directors independent Non-Executive Member and Chairman of the Audit Committee.
Arvanitis Nikolaos, Board of Directors independent Non-Executive Member and Member of the Audit Committee.
Karamaneas Charalampis, Board of Directors Non-Executive Member and Member of the Audit Committee.
Following a relevant discussion made by the General Assembly of shareholders dated 15.07.2021 in terms of the Audit Committee's type, composition and term of office, as well as relevant decisions made by the Board of Directors on the 16.07.2021 and 07.09.2021, the current composition of the Audit Committee as of 07.09.2021, is as follows:
Kwong Che Keung Gordon, Board of Directors independent Non-Executive Member and Chairman of the Audit Committee.
Arvanitis Nikolaos, Board of Directors independent Non-Executive Member and Member of the Audit Committee.
Politis Dimitrios, Board of Directors Non-Executive Member and Member of the Audit Committee.
The term of office of the Audit Committee will be equal to the term of office of the elected Board of Directors of the Company, whose term of office is annual, ie until 16.07.2022, which is extended, in accordance with the provisions of article 85, par. c of Law 4548/2018 until the expiration of the deadline, within which the next Ordinary General Meeting must be convened in 2022 and until the relevant decision is taken.
The members of the Audit Committee, all non-executive members, did not hold positions incompatible with their status during 2021, while both their objectivity and independence were ensured, in the absence of any transaction with the Company that could affect them.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The main responsibilities of the Audit Committee is to assist the work of the Board of Directors in the execution of its duties by overseeing the financial information procedures, policies and internal control system of the Company. Its responsibilities are defined by the current legislation (Law 4449/2017) as in force, within the current institutional framework and corporate governance principles regarding companies whose securities are traded on a regulated market (listed companies) and its Operation Regulation, which has been approved by the BoD and is uploaded to the company's website.
During 2021, the Audit Committee met three (3) times while additionally in four (4) other cases decisions were issued through circulation of minutes.
In order to ensure the Company's independence, the meetings took place without the presence of other top management executives, except in cases where their presence was deemed necessary (such as the cases of discussion of the review of the interim and annual Financial Reports). All Committee members participated in all the meetings and all Committee decisions were taken unanimously.
The main issues handled by the Audit Committee in 2021 were the following:
• Monitoring and evaluation in collaboration with the competent bodies of the Management and the External Auditor of the Company of the process of preparation of the semi-annual and annual Financial Statements, prepared in accordance with the International Financial Reporting Standards and confirmation of their accuracy and completeness, according to the information provided to its members.
• Evaluation of the Financial Statements of the Company (annual and semi-annual) and confirmation of their completeness and consistency, before their approval by the Board of Directors.
• Discussion with the External Auditor and receiving information about their cooperation with the Management on issues of financial control.
• Discussion and provision of its agreement to all official announcements concerning the Company's financial issues.
• Evaluation and approval of the internal audit program and review of the results of the audits carried out by the Internal Audit Department.
• Monitoring the effective operation of the internal control and risk management system, in accordance with the applicable legal and regulatory framework.
• Provision of its consent to the proposal of the Board of Directors to the Ordinary General Meeting of Shareholders for the re-appointment of the auditing company "PwC", as External Auditor for the mandatory audit of the Company for the year 2021.
• Evaluation and confirmation on the objectivity and independence of the External Auditor, receiving a relevant letter.
• Assessing the nature and cost of the non-audit services provided by the External Auditor and confirmation that they do not pose a threat to the independence of the latter regarding the statutory audit of the fiscal year 2021, in accordance with the provisions of L.4449/2018 and Regulation 537/2014 of the EU.
• Provide information to the Board of Directors of the Company about the issues within its competence.
A self-assessment process of the Audit Committee took place in the form of a questionnaire. The structure of the questionnaire was designed to assist and to provide guidance to PPA SA Audit Committee in evaluating the key roles, responsibilities and general effectiveness of its operation and identify any weaknesses that should result in an action plan for improving its performance to an acceptable level, by including questions that have been selected from the Legislative and Regulative framework applied for its operation. Through the above self-assessment process, no issues were identified, which need corrective actions.
In carrying out its work in general, the Audit Committee had full access to all the information necessary for the effective performance of its duties. The discussions and the decisions of the Audit Committee are recorded in minutes signed by the members.
I.V.5. Nomination Committee
The Nomination Committee operates in accordance with the provisions of articles 10 and 12 of L.4706/2020. It is a Committee of the Board of Directors and is composed of three (3) non-executive members of the Board of Directors, of which two (2) are independent under the article 9 of Law 4706/2020, which were appointed by the BoD Meeting of Shareholders that took place on 16.07.2021.
During the fiscal year 2021, the Nomination Committee's composition was as follows:
IP Sing Chi, Board of Directors independent Non-Executive Member and Chairman of the Nomination Committee.
ZHU Jianhui, Board of Directors Non-Executive Member and Member of the Nomination Committee.
Kwong Che Keung Gordon, Board of Directors independent Non-Executive Member and Member of the Nomination Committee.
The term of office of the Nomination Committee will be equal to the term of office of the elected Board of Directors of the Company, whose term of office is annual, i.e. until 16.07.2022, which is extended, in accordance with the provisions of article 85, par. c of Law 4548/2018 until the expiration of the deadline, within which the next Ordinary General Meeting must be convened in 2022 and until the relevant decision is taken.
The members of the Nomination Committee, all non-executive members, did not hold positions incompatible with their status during 2021, while both their objectivity and independence were ensured, in the absence of any transaction with the Company that could affect them.
The responsibilities and the mode of operation of the Nomination Committee are described in the Internal Rules of Operation of the Committee, which has been approved by the Board of Directors and is available at website of the Company.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
During 2021 (in the almost less than half year period after its establishment), the Nomination Committee met two (2) times.
To ensure the independence of the Nomination Committee, the meetings were held without the presence of other members of the Management. All the members of the Committee attended all the meetings and all the decisions of the Committee were taken unanimously.
The main issues handled by the Nomination Committee in 2021 were the following:
The enhancement of the collective suitability and diversity of the Board of Directors, in such a way that the new composition of the Company's Board of Directors, fully covers the appropriate and suitable exercise of the responsibilities of the Board of Directors of the Company and reflects the size and activity of the Company and can further contribute to the implementation of its business objectives.
The expansion the composition of the Board of Directors of the Company by adding new independent non-executive member and further enhancing women's representation in it, in accordance with Law 4706/2020 and the Suitability Policy of the Board of Directors members established by the Company, based on which a respective proposal was submitted.
The supervision of the preparation of the introductory information program of the new members of the Board in the context of fulfilling their duties and according to the operational needs of the Board.
The new Board members appointed during 2021 have received an Induction Program whose main objectives were to (a) communicate the Company's vision and culture, (b) communicate practical procedural duties, (c) reduce the time taken for them to become productive in their duties, (d) become familiar with the Company's organizational structure, (e) give them an understanding of Company's business and strategy and the markets in which it operates, (f) to provide a link with the Company's people and an understanding of its main relationships. Also, the new Board members, upon their appointment received information material of Company's Obligations towards Supervisory Authorities, aiming to inform them on their main obligations under the legislative and regulatory framework that the Company operates.
The evaluation of the fulfillment of the independence criteria of the Independent Non-Executive Members of the Board of Directors, according to the definition of the law, as well as the evaluation of the existence of conflicts of interest to the extent that hinders the ability of Members to perform their duties independently and objectively (independent will).
Despite the short time since its establishment (in the second half of the year), a self-evaluation process of the Nomination Committee took place in the form of a questionnaire. The structure of the questionnaire was designed in order to assist and guide the Nomination Committee of PPA SA. in evaluating the key roles, responsibilities and overall effectiveness of its operation. Through the above self-evaluation process, no issues were identified, which need corrective actions.
The Remuneration Committee operates in accordance with the provisions of articles 10 and 11 of L.4706/2020. It is a Committee of the Board of Directors and is composed of three (3) non-executive members of the Board of Directors, and all of them are independent under the article 9 of Law 4706/2020, who were appointed by the BoD Meeting of Shareholders that took place on 16.07.2021.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
During the fiscal year 2021, the Remuneration Committee's composition was as follows:
ARVANITIS Nikolaos, Board of Directors independent Non-Executive Member and Chairman of the Remuneration Committee.
IP Sing Chi, Board of Directors independent Non-Executive Member and Member of the Remuneration Committee.
KWONG Che Keung Gordon, Board of Directors independent Non-Executive Member and Member of the Remuneration Committee.
The term of office of the Remuneration Committee will be equal to the term of office of the elected Board of Directors of the Company, whose term of office is annual, ie until 16.07.2022, which is extended, in accordance with the provisions of article 85, par.1 c of Law 4548/2018 until the expiration of the deadline, within which the next Ordinary General Meeting must be convened in 2022 and until the relevant decision is taken.
The members of the Remuneration Committee, all non-executive members, did not hold positions incompatible with their status during 2021, while both their objectivity and independence were ensured, in the absence of any transaction with the Company that could affect them.
The responsibilities and the mode of operation of the Remuneration Committee are described in the Internal Rules of Operation of the Committee, which has been approved by the Board of Directors and is available at website of the Company.
During 2021 (in the almost less than half year period after its establishment), the Remuneration Committee met two (2) times.
To ensure the independence of the Remuneration Committee, the meetings were held without the presence of other members of the Management, All the members of the Committee attended all the meetings and all the decisions of the Committee were taken unanimously.
The main issues handled by the Remuneration Committee in 2021 were the following:
Despite the short time since its establishment (in the second half of the year), a self-evaluation process of the Remuneration Committee took place in the form of a questionnaire. The structure of the questionnaire was designed in order to assist and guide the Remuneration Committee of PPA SA. in evaluating the key roles, responsibilities and overall effectiveness of its operation. Through the above self-evaluation process, no issues were identified, which need corrective actions.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
IV.7. Periodic Evaluation Policy of the Internal Control System of PPA SA and Implementation of the provisions on Corporate Governance of Law 4706/2020
PPA S.A. (hereinafter the "Company") recognizing the importance of the operation of an adequate and integrated Internal Control System (hereinafter "ICS") to achieve its business objectives and in accordance with Law 4706/2020 regarding corporate governance and decision of the Board of Directors of the Hellenic Capital Market Commission 1/891/30.09.2020 as in force from time to time, adopts the present policy of periodic evaluation of the Company's ICS as well as of the Implementation of the provisions on Corporate Governance of Law 4706/2020.The Company's ICS includes five (5) basic elements that exist and operate in the Company and are described in general terms below:
The Company is committed to operate with integrity and ethical values. Its organizational structure determines a specific position and specific and distinct responsibilities for each body and organizational unit of the Company. There are specific benchmarks and areas of responsibility in achieving the Company's goals, while a regulation is followed on the selection and recruitment of staff and senior management as well as a remuneration policy aiming at attracting and retaining highly qualified human resources.
In particular:
The Management of the Company provides direction, leadership as well as an appropriate environment for its operation, in order to ensure that all its available resources are fully utilized to achieve its objectives. The Company has a Code of Conduct. Any deviation is reported to the Top Management which is solely responsible for taking relevant actions.
The Company maintains an organizational structure sufficient for the planning, execution, control and supervision of corporate operations for all its Departments and operational activities, according to which the main areas of responsibility are determined while at the same time the appropriate reference lines are established.
The Board of Directors of the Company meets every time the Law, the Bylaws or the needs of the Company dictate and decides on any matter concerning the management of the Company, the management of its assets and the general pursuit of its purpose. The Board of Directors maintains adequate oversight of the operation and effectiveness of the ICS. For this purpose, it consists of a sufficient number of executive, non-executive and independent non-executive members, with a variety of knowledge, skills and experience in order to achieve the business model and strategy of the Company.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The Company maintains appropriate structures and pursues policies that promote the principle of responsibility, the speed of decision making, the smooth operation of the Company and the effective control of all its actions. Based on this principle, responsibilities are assigned to the executives of the Company, according to their position in the hierarchy and their qualifications. Furthermore, the Company forms the framework to enable the individual organizational units to operate within the components of the specific management authority (Responsibility – Accountability Obligation - Assumption of Responsibility), as well as the Management to control its effectiveness.
Recognizing the utilization of human resources as a cornerstone for the achievement of the Company's goals, the Company pursues specific policies of recruitment, training, remuneration, and evaluation of staff.
The Company clearly communicates its objectives in the individual Departments in a simple and understandable way, so that they are taken into account during the process of risk identification and risk assessment as well as its acceptable risk tolerance level. In general, the Top Management of the Company determines the way of responding to the risks by categorizing them according to the probability and their impact on the operation of the Company in the following categories:
The recording of the risks faced by the Company as well as the management and risk response procedures, is carried out in all operations of the Company on an annual basis. In addition, the Company has established control mechanisms and safety valves to detect and/or prevent the inability to deal with risks, in order to achieve its objectives.
The Company has a Risk Management function, which operates in accordance with appropriate and effective policies, procedures and tools (such as keeping a risk register) on the determination, analysis, control, management and monitoring of any kind of risk inherent to the operation of the Company.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The Company develops policies and procedures in accordance with the objectives of the Management. In addition, it implements a system of safety valves, based on the risks it has identified, but considering the specific characteristics of the Company. Special emphasis is placed on the adequacy, proper implementation and monitoring of procedures, the handling of error cases and the frequency of reassessment of policies and procedures.
In addition, the Company implements adequate safeguards for issues of conflict of interest, segregation of duties as well as the governance and security of its Information Systems.
The Company ensures the quality of financial and non-financial information and follows appropriate ways of internal and external communication, such as communication with the members of the Board of Directors, shareholders and investors, communication with the existing Company committees, complaint on whistleblowing, Regulatory Authorities etc.
The Company has mechanisms and functions that have as object the continuous evaluation of the Internal Audit System and the reporting of findings to be corrected or improved:
The Company has an Audit Committee, which is a committee of the Board of Directors, consists in its majority of independent non-executive members of the Board and its goal is to support the Board of Directors fulfilling its responsibilities for overseeing compliance control procedures with the legislative and regulatory framework on: (a) financial information, (b) the internal control system, the risk management system, the regulatory compliance system and (c) its supervision of the (external) statutory audit of the financial statements of the Company.
The Company has an Internal Audit Department, which operates in accordance with the applicable Regulation approved by the Board of Directors. The Internal Audit Department is organizationally independent and adequately staffed. Implements the appropriate tools and control methodology in order to achieve the best result, while the audit reports that are prepared are submitted at least quarterly to the Audit Committee and then to the Board of Directors.
The Company has a Regulatory Compliance function, which is functionally independent. It is staffed with staff who have sufficient knowledge and experience to carry out their responsibilities and are trained and informed in order to monitor the effective adoption and unwavering implementation of changes taking place in the regulatory framework, with direct access to all required sources of information. In addition, it implements adequate procedures for the prevention and suppression of money laundering activities. It follows the annual audit plan, while the findings of its work are promptly and truthfully communicated.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The Company in the context of ensuring the continuous operation of an adequate and integrated ICS and the continuous improvement where and when deemed appropriate, follows this policy, which sets out the framework for periodic evaluation of the ICS and implementation of the provisions on Corporate Governance of Law 4706/2020 that is in effect and governs its operation.
The content of this policy fully complies with Law 4706/2020 and the relevant decision 1/891/30.09.2020 of the Board of Directors of the Hellenic Capital Market Commission. The terms of this policy are applied in combination with the respective provisions of the Company's Internal Organization and Operation Regulations, the Regulations of the Audit Committee, the Internal Audit Department, the Regulatory Compliance function and the Risk Management function.
The purpose of this policy is to establish the framework to ensure the timely and correct implementation of the periodic evaluation of the ICS based on the respective standards by appropriate evaluators and the compliance of the Company with the applicable legislation on relevant corporate governance matters.
This policy applies to Top Management, the collective bodies and all the organizational units of the Company, its processes and functions, as well as its Information Systems.
The Top Management, the collective bodies and all the organizational units are obliged to comply with the content of this policy.
The subject of this policy includes the general principles regarding the object, the periodicity of the audit, the scope of evaluation and the general process which governs the periodic evaluation of the Company's ICS as well as the Implementation of the provisions on Corporate Governance of Law 4706 / 2020 as well as the assignment and monitoring of the results of the evaluation and the determination of the object of the evaluation.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The periodic assessment of the adequacy of the ICS is carried out on the basis of international best practices.
The purpose is to evaluate the system of identification and risk management and regulatory compliance developed by the Company, the system of safeguards that applies to the adequacy and effectiveness of financial information, as well as the application of corporate governance provisions of the Law. 4706/2020
Subject of the evaluation are the following:
The review of the control environment consists mainly of the following:
Integrity, Morals & Conduct of the Management: Examines to what extent a clear framework of integrity and morals that run through the decision making of the Board of Directors have been implemented as well as to what extent there are monitoring procedures on full compliance so as any deviation is detected promptly and corrected appropriately.
Organization structure: To what extent the organizational structure of the Company provides for a framework on the planning, execution, control and supervision of the Company's activities based on its organizational structure for each business unit and its operational activities according to which the primary areas of responsibility within the Company are determined and the suitable reference guidelines are determined depending on the size of the Company and the nature of its activities
Board of Directors: The structure, organization and the way of operation of the Boards of Directors and its committees are examined: in particular, with regard to a) the relation with the executive administration, b) the supervision authority on the operation and the effectiveness of the ICS and c) the composition of the Board of Directors (eg size, suitability and diversity of its members etc.).
Corporate responsibility: The operation of the higher executive administration and the way in which it implements under the supervision of the Board of Directors, the appropriate infrastructures, reference lines, areas of responsibility and power in order to achieve the scope of the Company are examined.
Human Resources: The following but not limited to the recruitment practices, fees, training and evaluation of the performance of the personnel are examined in order to establish the commitment of the Administration to the principles of integrity, morals and sufficient knowledge of the personnel).
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
It consists of the review of the risk acknowledgement and assessment procedure (risk assessment), management and response procedures of the Company to the said risks (risk response) and the procedures on the monitoring of the development of the risk (risk monitoring).
In particular, the following are reviewed:
the work and duties of the Risk Management function, and
the implementation of the appropriate and effective policies, procedures and tools (such as keeping a risk register) on the determination, analysis, control, management and monitoring of any kind of risk inherent to the operation of the Company.
Review of the mechanisms on the control of the critical safety net emphasizing on the safety net related to conflict of interest issues, separation of duties and governance and security of Information Systems.
Review of the procedure of the development of the financial (including the reports of the auditing mechanisms (e.g. Supervisory, Regulatory and Regulating Authorities, Independent Professional Entities etc.) and non-financial information (e.g. sustainable development policy, environmental, social and labor issues, respect of human rights, fight against corruption, issues on bribery as provided in article 151 of Law 4548/2018) as well as the review of the procedures on the critical internal and external communication of the Company, which are mentioned above at point 1.d.
Review of the infrastructure and the mechanisms of the Company that are competent for the constant evaluation of the components of the ICS and the report of the findings to be corrected or improved.
In particular, the operation of the following infrastructure and mechanisms are reviewed:
It concerns the review by the evaluator of the procedure on the monitoring of the efficiency of the ICS by the Audit Committee.
It includes the review by the evaluator of the following elements on the organization and operation of the Internal Audit Department and the compliance with the provisions of articles 15 and 16 of Law 4706/2020 and the applicable regulatory framework, i.e. the policies, procedures, practices and applicable legislative and regulatory requirements and in particular:
The implementation and application of an approved Regulation of Operation of the Internal Audit Department by the Board of Directors.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The integration of the operation of the Internal Audit Department to the framework of the governance of the Company, its organizational independence and the sufficiency of its staffing.
The review of the tools and techniques used by the Internal Audit Department.
The review of the combination of the knowledge and qualifications of the personnel of the Internal Audit Department.
The "random" review of the audit reports on the Internal Audit Department of the Company and its affiliates as to the prompt filing as well as the appropriateness and completeness thereof based on the provisions of article 16 of Law 4706/2020.
The effective operation of the supervisory bodies of the Internal Audit Department as these are provided in the regulatory framework and the Company's Internal Organization and Operation Regulations.
It refers to the review by the evaluator of the monitoring procedure on the compliance with the regulatory and legal framework as well as the internal regulations that govern the operation of the Company. The provisions on corporate governance of Law 4706/2020 are included in the said framework.
In particular, the following are reviewed:
the Regulatory Compliance function, as to its independence, possibility to access all the necessary sources of information, the prompt and truthful communication of all its findings, the training on regulatory compliance matters and the monitoring of the effective adoption and the application without any deviations of the changes in the regulatory framework.
the adequacy of the procedures as to the prevention and fight against money laundering from criminal activities, where applicable.
the sufficient staffing with persons that have the sufficient knowledge and experience to carry out the said duties.
the adoption of an approved annual audit plan and the monitoring of its implementation.
The evaluation of the ICS is carried out either periodically or on an ad hoc basis.
Periodicity is defined as the time period between two consecutive evaluations and which is determined in three (3) years starting from the reference date of the last evaluation.
The time is defined as the time at which it is required to carry out either the periodic evaluation or the ad hoc evaluation at the request of the Hellenic Capital Market Commission.
In any case, the evaluation of the ICS is part of the overall evaluation of the corporate governance system of the Company, according to article 4 par. 1 of Law 4706/2020.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The first assessment of the ICS must be completed and sent to the Hellenic Capital Market Commission, in accordance with the decision 1/891/30.09.2020 of the Hellenic Capital Market Commission, by 31 March 2022 with a reference date 31 December 2021 and a reference period from the effective date of article 14 of law 4706/2020.
The evaluator is a legal or natural entity or association of persons. The evaluator shall have the following characteristics:
When selecting the evaluator of the ICS, matters of independence and integrity are taken into consideration. The evaluator and the members of his taskforce must be independent and do not have any dependency according to par. 1 of article 9 as particularized in par. 2 of Law 4706/2020 as well as be objective in the course of exercising his duties.
Objectivity is the impartial attitude and ways of thinking that shall allow for the evaluator to perform his duties as he thinks proper and do not settle as to its quality. The objectivity requires for the evaluator not to be affected by third parties or other facts.
In the course of ensuring the independence and the objectivity, the evaluation of the ICS shall not be carried out by the same evaluator for three subsequent evaluations.
When selecting the evaluator of the ICS matters related to the knowledge and his professional experience are taken into consideration. In particular, the head of the taskforce of the evaluation of the ICS and in any case the signatory of the evaluation must have the appropriate professional qualifications (depending on the professional standards that he refers to) as well as proven relevant experience (such as in evaluations of other ICS and structures of corporate governance).
The evaluator implements all the necessary measures in order in the course of his work the persons that participate therein have the appropriate knowledge and experience as to the duties assigned to them and he uses the suitable systems on quality assurance, sufficient human and material resources and procedures in order to ensure the continuity, periodicity and quality of the performance of the works.
The Company assigns timely, through its competent bodies, the evaluation of the ICS to a suitable external evaluator. Specifically:
Within a reasonable time and at least six months before the date of mandatory submission of the final evaluation report to the Hellenic Capital Market Commission, the Audit Committee arranges for the receipt of bids by appropriate, in accordance with the provisions of point (7d), evaluators for the award of the relevant project to evaluate the ICS.
Interested parties are invited to submit a bid within a specific deadline specified in the relevant invitation, where relevant reference is made to the independence and proven experience and training in relevant ICS and corporate governance structure evaluation projects as defined in point (7 d).
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The submitted bids are reviewed and evaluated by the Audit Committee, which proposes as the competent body to the Board of Directors, the assignment of the evaluation of the ICS to the appropriate at their discretion evaluator, considering the independence and professional experience of the candidate. The Board of Directors decides upon the assignment to the appropriate evaluator.
The Regulatory Compliance function and / or the Internal Audit Department, under the guidance of the Audit Committee, facilitate the evaluator during the implementation of his project regarding the communication and cooperation with the various bodies or Departments of the Company.
The evaluator carries out the evaluation of the ICS, within the agreed schedule and upon completion submits an evaluation report, which should at least include:
Summary of test results and a detailed description of them;
The time of submission of the evaluation report;
The reference date of the evaluation and the period it covers (which starts from the next day of the reference date of the previous evaluation).
The summary includes the evaluator's conclusion regarding the adequacy and effectiveness of the Internal Control System. It also includes the most important findings of the evaluation, the risks and the consequences arising from them as well as the response from Top Management to these findings, including the relevant action plans with clear and realistic timetables.
The detailed report includes all the findings of the evaluation with the relevant analyses.
Recipients of the report are defined the Audit Committee and the Board of Directors.
The Company submits without delay to the Hellenic Capital Market Commission, and in any case within three (3) months from the reference date of the evaluation report, the report and, if required, the detailed report.
The annual declaration on corporate governance includes reference to findings of the relevant evaluation report.
Reference of this policy is made to the Internal Organization and Operation Regulation of the Company as it applies, the Regulation of operation of the Audit Committee and the Internal Audit Department and the Company's Corporate Governance Code.
This policy shall enter into force on the date of its adoption and shall not be subject to any exceptions.
This Policy will be evaluated for update when significant changes are identified in the covered area or upon the implementation of legislative changes.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The Company has an Internal Audit Department under the supervision of the Audit Committee. The Board of Directors, upon the proposal of the Audit Committee, appoints the Head of the Internal Audit Department, pursuant to article 15 of Law 4706/2020.The members of the Internal Audit Department are independent in the exercise of their duties, do not belong to any other Department of the Company and are supervised by the Audit Committee, which is responsible for monitoring their independence and their evaluation.
The responsibilities of the Internal Audit Department, are the following:
a) To monitor, audit and evaluate:
• the implementation of the Internal Organization & Operation Regulation and the Internal Audit System, in particular as to the adequacy and accuracy of the provided financial and non-financial information, risk management, regulatory compliance and the Code of Corporate Governance adopted by the Company,
• the compliance with the commitments contained in newsletters and the Company's business plans regarding the use of funds raised from the regulated market.
b) To prepare reports to the audited Departments with findings regarding tasks Nr. a), the risks arising from them and suggestions for improvement, if any. The reports, after incorporating the relevant comments of the audited Departments, the agreed actions, if any, or the acceptance of the risk of nonaction by them, the limitations on its scope of audit, if any, the final internal audit proposals and the results of the response of the audited Departments of the Company to its proposals, are submitted at least quarterly to the Audit Committee.
c) To inform the Audit Committee on a monthly basis about its activities, the audits carried out and the progress of its work.
d) To submit at least every three (3) months to the Audit Committee reports, including its most important issues and proposals, regarding the tasks a) and b), which the Audit Committee presents and submits along with recommendations to the Board.
e) To ensure the receipt of written complaints and their examination, in accordance with the provisions of the Code of Ethics chapter 19, regarding the Internal Complaints Process (ICP).
f) To be present only to the tenders that concern Mandatory Enhancements (ME), providing at all stages of the tender procedure consulting assistance to the Tender Management Committees and Tender Evaluation Committees, regarding the issues of compliance of the procedures with the decisions of the Management and the Internal Regulations and to those who are specially assigned by the Chairman of the BOD and/or the CEO and submits relevant reports to the President of the TMT and the CEO and Administration Board at the stage of submitting the relevant proposals.
a) Submits to the Audit Committee an annual audit plan for the following year and the requirements for the necessary resources, as well as the implications of the resource limitation or audit work of the Department as a whole. Once approved, the annual audit plan is submitted by the Audit Committee to the Board of Directors for final approval.
b) Attends the general meetings of shareholders and
c) Provides in writing any information requested by the Hellenic Capital Market Commission, cooperates with it and facilitates in every possible way the task of monitoring, auditing and supervising by it.
V.Diversity Policy applied in relation to the Company's administrative, managerial and supervisory bodies
Given the fact the Board of Directors is the highest administrative body of the Company, which is responsible for the safeguarding of the broader corporate interests, the policy making and the growth strategy of the Company as well as for the strengthening of the long-term economic value of the Company, it is very essential for the particular body to possess, with regard to its composition, a diversity of skills, views and abilities which at the same time respond to the need to effectively attain corporate goals.
From the time of the Company's establishment and until today, the entire members of the Board of Directors fulfill all necessary conditions and have set the foundations in order to be granted with the capacity of the member of the Board of Directors. At the same time, they are distinguished for their high professional skills, educational level, knowledge, capabilities, experiences and their organizational and administrative abilities, and at the same time they possess high standards of ethics and integrity of character. The members of the board of Directors cover a broad range in terms of age combining effectively their dynamics and experience (indicatively between 49 and 73 years old). The members, in their majority, are holders of graduate and postgraduate degrees of domestic as well as international universities, have worked in high ranked positions of major companies domestically and abroad. They have also been members of the higher managerial staff of large organizations and as a result they possess significant international experience in the corporate as well as the broader social fields and are in position to actively contribute to the growth prospects of the Company. They finally fulfill the requirements of suitability as well as the criteria with regard to the Company's effective staffing and operation.
The current composition of the Board of Directors aims undoubtedly at the best possible facilitation of corporate goals, as it increases the pool of skills, experience and vision that the Company has for its highest-ranking personnel, and consequently its competitiveness, productivity and innovation.
The current 11-member Board of Directors of the Company, consists of 9 men and 2 women and was elected in the framework of the decision of the Company's Management for immediate, substantial and effective compliance and harmonization with the provisions of the law 4706/2020 on suitability, diversity and, above all, adequate representation by gender on the Board of Directors and completely covers the appropriate exercise of the responsibilities of the Board of Directors of the Company, reflects the size and activity of the Company and its characteristic feature is diversity of knowledge, skills and experience that can contribute to the achievement of business objectives.
The Company recognizes the importance of its compliance with the obligations arising from articles 99 to 101 of Law 4548/2018, regarding transactions with related parties, to ensure the smooth and efficient operation of the market.
Therefore, the Company establishes the following procedure of compliance with the obligations arising from articles 99 to 101 of Law 4548/2018, regarding transactions with related parties:
The Group to which the company belongs, maintains a list of related parties, from which the Company has the opportunity to obtain relevant information.
Contracts of the Company with related parties, as well as the provision of security and guarantees to third parties in favor of such 29 parties, within the meaning of articles 99-101 of Law 4548/2018, are only permitted upon prior authorization by the Board of Directors or, in the case of paragraph 4 of this article, by the General Meeting. Related parties with respect to the Company are those parties defined as related parties of the Company pursuant to International Accounting Standard 24, as well as the legal entities controlled by them, pursuant to International Accounting Standard 27.
In the case where, a contract with a related party of the Company is awarded after and according to tender procedures, as they are described in the approved and posted on the Company's website Regulations for the Award of Contracts and Sub-concessions of the Company, the above paragraph is not followed.
The Board of Directors may grant authorization, pursuant to the preceding paragraph, which is valid for six (6) months. In the case of recurring contracts with the same person, a single authorization may be provided that sets forth the characteristics of the contracts concerned and is valid for one (1) year.
Within ten (10) days as of the publication of the notice on the granting of the said permission by the Board of Directors, shareholders representing one twentieth (1/20) of the paid-in share capital may request the convocation of the General Meeting in order for the General Meeting to adopt a resolution on the matter of the said permission. The contract for which permission has been granted by the Board of Directors shall be considered as effective only after the lapse of the said ten-day time period or upon securing the permission of the General Meeting or upon a written statement by all shareholders to the Company to the effect that they do not intend to request the convocation of the General Meeting.
If by the time permission is granted by the General Meeting, the contract under para. 1 of this article has already been concluded or the guarantee or security has been provided, then the granting of permission by the General Meeting is canceled if objected to by shareholders representing one twentieth (1/20) of the capital represented at the Meeting.
If the transaction involves a shareholder of the Company, the shareholder concerned does not take part at the vote in the General Meeting and is not counted for the purposes of quorum and majority. Other shareholders with whom the counterparty is related under a relationship falling under paragraph 2 of article 99 of Law 4548/2018 will not take part in the vote either. This paragraph is not applicable when permission by the Board of Directors was given with the concurrence of the majority of its independent members.
In all cases, the granting of permission by the General Meeting is canceled if opposed by shareholders representing one third (1/3) of the capital represented thereat.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
If the permission for the conclusion of the contract was given by the General Meeting, any amendments thereto may be made under permission by the Board of Directors, unless the General Meeting has reserved for itself the right to authorize such amendments as well.
Decision thereon by the Board of Directors or the General Meeting is made on the basis of a report by a certified public accountant or auditing firm or other third party unrelated to the Company, that assesses whether the transaction is fair and reasonable for the Company and shareholders who are not a related party, including the minority shareholders of the Company, and explains the assumptions on which it has relied together with the methods employed.
The Board of Directors issues a notice about the granting of permission to the conclusion of the contract by the Board itself or by the General Meeting, and the lapse of the time period set forth in paragraph 4 of the present article. Such notice is published prior to the conclusion of the transaction. An inaccuracy in the notice cannot be invoked towards third parties, unless the Company demonstrates that such third parties were aware of the inaccuracy in question. The notice shall as a minimum include information: (a) on the nature of the relationship of the Company to the related party; (b) the date and value of the transaction; (c) any other information as necessary in order to assess whether the transaction is fair and reasonable for the Company and those persons who are not a related party, including the minority shareholders. The said notice is accompanied by the report referred to in the preceding paragraph. A transaction entered into between the related party of the Company and a Company subsidiary shall also be submitted to the publication formalities.
The Company, implements a Sustainable Development Policy and seeks, over time, to create value for its stakeholders, i.e. shareholders, customers, employees and society in general.
To achieve this goal, the Company places particular emphasis on, among others, the training and development of its personnel, health and safety at work, as well as respect for the environment, following the principles of sustainable development.The Sustainable Development Policy of the Company reflects the approach and commitment of the Management to the issue of responsible operation. Responsible operation is a continuous commitment to action of substance, in order to generate value for all stakeholders that meet the modern needs of society and contribute in general to its prosperity. The Company has a specific strategy, which focuses on the important issues related to its activity and seeks its continuous responsible development, focusing on the critical pillars of business responsibility: Economy, Society, Environment.
Sustainable development is an integral part of the Company's business practice model and culture. In the context of the implementation of Sustainable Development, the Company develops activities, among others, in the following areas:
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
For the above main issues concerning the Company, individual Sustainable Development goals are set, which are evaluated on an annual basis in terms of their effectiveness and are reviewed when necessary. The policy, the results of the Company's performance in the issues of Sustainable Development, as well as the implementation of the programs and the achievement of the objectives, are published on an annual basis, in order to fully and comprehensively inform under a general framework of transparency of all partners, which are considered during the annual Management Review for all the above issues.
PPA SA Supports the United Nations 2030 Agenda, as set out in the 17 Sustainable Development Goals, with a view to actively contributing to their achievement by promoting the prosperity and security of the people; environmental protection and the fight against poverty.
The priority of PPA SA is the fulfillment of the objectives that are directly related to the activities and challenges of the sector in which it operates, as well as to the essential issues arising from the Corporate Responsibility and Sustainable Development Report, which details the connection of the programs and of the Company's actions with the Sustainable Development Goals.
The strategy, programs, results and related commitments are analyzed in the annual Corporate Responsibility and Sustainable Development Report, which is based on the Global Reporting Initiative (GRI) guidelines and more specifically the Standards (In Accordance - Core), which are the most internationally recognized and demanding guidelines of their kind, and is available in the Company's website.
One of the most important and fundamental guiding principles of the GRI is the concept of materiality. PPA addresses the issues that cause the most significant economic, environmental and social impact, or those that are considered most important, by its internal and external stakeholders. In the process of identifying the essential issues PPA actively involves its stakeholders and considers all the issues and topics in the given time period that fall within the limits of the organization's exposure.
During the process of identifying the essential issues, PPA SA conducted quality, electronic research on representatives of its Stakeholders in order to examine all important issues related to Corporate Responsibility, as well as to systematize the dialogue with them on these issues.
The methodology followed is described below:
Step 1: Identify and prioritize the main Stakeholders, who will be included in the process of finding the essential issues. Involves stakeholder groups such as employees, NGO representatives, suppliers, customers and local community representatives.
Step 2: Identify and prioritize key indicators (economic, environmental, social, work practices, human rights, responsible services, etc.), using the GRI guidelines.
Step 3: Conduct a survey, through a quality questionnaire to identify the key issues in the opinion of stakeholders and management. The following quality scale was used for each question: Very Important, Important, Not at all Important. The stakeholders who responded to the questionnaire consist of the following internal and external ensembles: employees, NGO representatives, suppliers, customers and local community representatives. The same questionnaire was completed by the members of the administration.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Step 4: Create a table (matrix) that identifies the essential issues. A numerical value was given to each response to the significance questionnaire (High Significance = 3, Medium Significance = 2, Low Significance = 1).
For each essential question included in the questionnaire, an average value was calculated through the answers of all interested parties.
The GRI guidelines recommend the design of issues according to their materiality in a materiality matrix, with the X-axis representing issues that cause significant impact on the operation of PPA SA. (Management view), and the Y-axis to represent issues that are considered important between stakeholders (stakeholder view). The issues that are considered very important for the Management and the Stakeholders are included in detail in the report.
By calculating both of the above parameters, as essential issues for 2021 are mentioned:
The present explanatory report of the Company's Board of Directors to the annual General Meeting of Shareholders is an integral part of the Annual Report of the Board of Directors.
The Company's share capital amounts to Euro fifty million (50,000,000€) and is divided into 25 million ordinary shares, of a nominal value of Euro two (€2,00) each. Each share is entitled to one vote. The Company's shares are dematerialised and listed to trading on the Athens Stock Exchange.
According to the Company's Articles of Association, the Company's shares and rights deriving therefrom are indivisible and, in case of joint ownership, the joint owners exercise their rights through a common representative, whereas each joint owner is jointly and severally liable to the Company for the fulfillment of the obligations deriving from the share.
The Company's shares may be transferred in the manner laid down by law and there are no restrictions on their transfer contained in the Articles of Association of the Company.
Following the execution of a share purchase agreement and corresponding over the counter transaction made on August 10th, 2016, COSCO SHIPPING (Hong Kong) Co., Limited obtained 51% of shares and voting rights in the Company.
As a result of an over-the-counter transaction that took place on 06 October 2021, the percentage of voting rights of COSCO SHIPPING (Hong Kong) Co., Limited in PPA S.A. has increased from 51% to 67%.
With the above over-the counter transaction, COSCO SHIPPING (Hong Kong) Co., Limited has acquired from Hellenic Republic Asset Development Fund S.A. an additional 16% of shares in PPA S.A.
The above transaction has taken place under an Amended Share Purchase Agreement between COSCO SHIPPING (Hong Kong) Co., Limited as Purchaser and Hellenic Republic Asset Development Fund S.A. as Seller, following ratification of an Amendment to the Concession Agreement between the Hellenic Republic and PPA S.A. (Law 4838/2021, Government Gazette 180A/ 01.10.2021).
COSCO SHIPPING (Hong Kong) Co., Limited is 100% held by China Shipping Group Co. Ltd, which is 100% held by China COSCO Shipping Corporation Limited. As a result of the transaction, China COSCO Shipping Corporation Limited indirectly holds 67% of voting rights in PPA S.A.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
As a result of the above referred transaction, the "Hellenic Republic Asset Development Fund S.A." percentage of voting rights in PPA S.A. directly has fallen from 23,1378% to 7,1378%. The total (100%) of the shares in HRADF S.A. is owned by EESYP S.A., which is 100% controlled by the Greek State. The transfer is attributed to an amended Share Purchase Agreement following ratification of the amendment of the Concession Agreement (Law 4838/2021, Government Gazette 180A/ 01.10.2021).
Pursuant to a transaction made on November 10, 2021, the percentage of voting rights in PPA held by the shareholder Helikon Long Short Equity Fund Master ICAV amounts to 5,376%.
There are no shares of the Company that grant to their holders special rights of control.
The Company's Articles of Association do not contain any restrictions to the voting rights deriving from the Company's shares.
The Company is aware of a Shareholders Agreement dated 8 April 2016 between COSCO Hong Kong Group Limited (currently incorporated under the corporate name COSCO SHIPPING (Hong Kong) Co., Limited) and Hellenic Republic Asset Development Fund S.A., which contains certain restrictions on the transfer of shares and certain limitations on voting rights of the contracting parties.
The rules contained in the Company's Articles of Association on appointment and replacement of members of the Board of Directors and on amendment of the provisions of the Articles of Association are not different from the provisions of the legislation. However, the Company wishes to inform that according to article 18 of the Articles of Association, as long as the Hellenic Republic Asset Development Fund S.A. or any global successor or successor by operation of law of the Hellenic Republic Asset Development Fund S.A. (each and collectively, the "FUND") holds at least one million two hundred and fifty thousand (1,250,000) voting shares and less than 10% of the voting shares issued by the Company and subject to the FUND is entitled to appoint one (1) Member pursuant to article 79 of Law 4548/2018 as in force. If the FUND holds at least 10% of the voting shares, the FUND is entitled to appoint 1/3 of the total number of Members of the Board of Directors of the Company. Should any Director appointed pursuant to paragraph 2 of this article resign or become incapacitated for whatever reason, they shall be replaced by such personas the HRADF shall specify in a pertinent written notice to the Company, with immediate effect.
No special competence different from the provisions of the legislation is awarded by the Articles of Association to the Board of Directors or to some of its members to issue new shares or purchase own shares of the Company.
Important agreements contracted by the Company, which will enter into effect, be amended or expire in case of change in the Company's control following a public offer and the results of such agreements
There are no such agreements.
PIRAEUS PORT AUTHORITY S.A Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Agreements that the Company has contracted with the members of the Board of Directors or with its personnel, which provide for the payment of compensation in case of resignation or release without substantiated reason or in case of termination of their term or employment due to a public offer
There are no such agreements.
Piraeus, March 14, 2022
THE CHAIRMAN OF THE BoD
YU ZENG GANG
[Translation from the original text in Greek]
We have audited the accompanying financial statements of Piraeus Port Authority S.A. (Company) which comprise the statement of financial position as of 31 December 2021, the statements of comprehensive income, changes in equity and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the financial statements present fairly, in all material respects the financial position of the Company as at 31 December 2021, its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union and comply with the statutory requirements of Law 4548/2018.
We conducted our audit in accordance with International Standards on Auditing (ISAs), as they have been transposed into Greek Law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
During our audit we remained independent of the Company in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) that has been transposed into Greek Law, and the ethical requirements of Law 4449/2017 and of Regulation (EU) No 537/2014, that are relevant to the audit of the financial statements in Greece. We have fulfilled our other ethical responsibilities in accordance with Law 4449/2017, Regulation (EU) No 537/2014 and the requirements of the IESBA Code.
We declare that the non-audit services that we have provided to the Company are in accordance with the aforementioned provisions of the applicable law and regulation and that we have not provided non-audit services that are prohibited under Article 5(1) of Regulation (EU) No 537/2014.
The non-audit services that we have provided to the Company, during the year ended as at 31 December 2021, are disclosed in the note 24 to the financial statements.
Page 98 of 161
PricewaterhouseCoopers SA, T: +30 210 6874400, www.pwc.gr
Athens: 268 Kifissias Avenue, 15232 Halandri, Greece | T:+30 210 6874400 Thessaloniki: 16 Agias Anastasias & Laertou, 55535 Pylaia, Greece | Τ: +30 2310 488880
Key audit matter is that matter that, in our professional judgment, was of most significance in our audit of the financial statements of the current period. This matter was addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on that matter.
| Contingent liabilities and provisions arising from litigation |
Our audit approach included the following key procedures: |
|---|---|
| The Company faces a number of pending legal proceedings (see Note 30 Commitments and contingent liabilities par. A and Note 17). The Company establishes provisions based on management's judgements of the probable amount of the liabilities. The level of judgement involved in estimating the provision and / or the level of disclosures required for contingent liabilities was considered as a key audit matter. |
• We obtained the analysis of provisions established and approved by management and we compared them to lists provided by the legal department with no exceptions. • Where relevant we obtained external legal confirmations directly requested by us. • For a sample of these pending legal proceedings, we reviewed documentation supporting the movement of the accounting balance during the year ended December 31, 2021. • We discussed a selection of open cases and their possible outcome with company's legal department and/or external lawyers as well as with management. |
| Based on evidence obtained we determined the level of provisioning at December 31, 2021 to be appropriate (Note 17 Provisions). We also consider that disclosures in Note 30 are deemed to be sufficient. |
The members of the Board of Directors are responsible for the Other Information. The Other Information, which is included in the Annual Report in accordance with Law 3556/2007, is the Statements of Board of Directors members and the Board of Directors Report (but does not include the financial statements and our auditor's report thereon), which we obtained prior to the date of this auditor's report.
Our opinion on the financial statements does not cover the Other Information and except to the extent otherwise explicitly stated in this section of our Report, we do not express an audit opinion or other form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the Other Information identified above and, in doing so, consider whether the Other Information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We considered whether the Board of Directors Report includes the disclosures required by Law 4548/2018 and the Corporate Governance Statement required by article 152 of Law 4548/2018 has been prepared.
Based on the work undertaken in the course of our audit, in our opinion:
In addition, in light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we are required to report if we have identified material misstatements in the Board of Directors' Report and Other Information that we obtained prior to the date of this auditor's report. We have nothing to report in this respect.
The Board of Directors is responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union and comply with the requirements of Law 4548/2018, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report.
Our opinion on the accompanying financial statements is consistent with our Additional Report to the Audit Committee of the Company.
We were first appointed as auditors of the Company by the decision of the annual general meeting of shareholders on 30 June 2016. Our appointment has been renewed annually by the decision of the annual general meeting of shareholders for a total uninterrupted period of appointment of 6 years.
The Company has an Operating Regulation in accordance with the content provided by the provisions of article 14 of Law 4706/2020.
We have examined the digital file of Piraeus Port Authority S.A. (hereinafter referred to as the "Company"), which has been compiled in accordance with the European Single Electronic Format (ESEF) defined by the Commission Delegated Regulation (EU) 2019/815, as amended by Regulation (EU) 2020/1989 (hereinafter "ESEF Regulation"), and which includes the financial statements of the Company for the year ended 31 December 2021, in XHTML format "549300UNB6JCR0XZT864-2021-12-31-el.xhtml".
The digital file of the European Single Electronic Format is compiled in accordance with ESEF Regulation and 2020 / C 379/01 Interpretative Communication of the European Commission of 10 November 2020, as provided by Law 3556/2007 and the relevant announcements of the Hellenic Capital Market Commission and the Athens Stock Exchange (hereinafter "ESEF Regulatory Framework").
In summary, this Framework provides that all annual financial reports should be prepared in XHTML format.
The requirements set out in the current ESEF Regulatory Framework are suitable criteria for formulating a reasonable assurance conclusion.
The management is responsible for the preparation and submission of the financial statements of the Company, for the year ended December 31, 2021, in accordance with the requirements set by the ESEF Regulatory Framework, as well as for those internal controls that management determines are necessary to enable the compilation of digital file free of material error due to either fraud or error.
Our responsibility is to plan and carry out this assurance work, in accordance with no. 214/4 / 11.02.2022 Decision of the Board of Directors of the Hellenic Accounting and Auditing Standards Oversight Board (HAASOB) and the "Guidelines in relation to the work and the assurance report of the Certified Public Accountants on the European Single Electronic Format (ESEF) of issuers with securities listed on a regulated market in Greece" as issued by the Board of Certified Auditors on 14/02/2022 (hereinafter "ESEF Guidelines"), providing reasonable assurance that the financial statements of the Company prepared by the management in accordance with ESEF comply in all respects with the current ESEF Regulatory Framework.
Our work was carried out in accordance with the Code of Ethics for Professional Accountants of the International Ethics Standard Board for Accountants (IESBA Code), which has been transposed into Greek Law and in addition we have fulfilled the ethical responsibilities of independence, according to Law 4449/2017 and the Regulation (EU) 537/2014.
The assurance work we conducted is limited to the procedures provided by the ESEF Guidelines and was carried out in accordance with International Standard on Assurance Engagements 3000, "Assurance Engagements other than Audits or Reviews of Historical Financial Information". Reasonable assurance is a high level of assurance, but it is not a guarantee that this work will always detect a material misstatement regarding non-compliance with the requirements of the ESEF Regulation.
Based on the procedures performed and the evidence obtained, we conclude that the financial statements of the Company, for the year ended December 31, 2021, in XHTML file format "549300UNB6JCR0XZT864- 2021-12-31-el.xhtml", have been prepared in all material respects, in accordance with the requirements of the ESEF Regulatory Framework.
Athens, 14 March 2022 The Certified Public Accountant
PricewaterhouseCoopers S.A. 268 Kifissias Avenue 152 32 Halandri Socrates Leptos – Bourgi SOEL Reg No 113 SOEL Reg No. 41541
for the year January 1 st – December 31 st , 2021
In accordance with the International Financial Reporting Standards as adopted by the European Union
| Notes | 01.01-31.12.2021 | 01.01-31.12.2020 Restated* |
|
|---|---|---|---|
| Revenue | 23 | 154,189,971.98 | 132,902,223.89 |
| Cost of sales | 24 | (77,375,617.18) | (72,703,538.42) |
| Gross profit | 76,814,354.80 | 60,198,685.47 | |
| Administrative expenses | 24 | (27,686,314.12) | (20,970,877.23) |
| Net impairment losses on financial assets | 11 | (882,101.88) | (1,050,165.79) |
| Other operating expenses | 25 | (580,106.38) | (1,630,435.03) |
| Impairment loss of non-current assets held for sale | 4 | - | (1,676,705.02) |
| Other operating income | 25 | 4,747,118.22 | 5,142,101.59 |
| Financial income | 26 | 106,376.68 | 367,567.99 |
| Financial expenses | 26 | (3,308,333.62) | (3,406,145.28) |
| Profit before income taxes | 49,210,993.70 | 36,974,026.70 | |
| Income taxes | 9 | (12,449,283.84) | (10,637,348.99) |
| Net profit after taxes | 36,761,709.86 | 26,336,677.71 | |
| Net other comprehensive income not to be reclassified in profit or loss in subsequent period: |
|||
| Actuarial losses | |||
| 16 | (34,245.43) | (41,583.66) | |
| Income taxes | 9 | 7,533.99 | 9,980.08 |
| Other total comprehensive income after tax | (26,711.44) | (31,603.58) | |
| Total comprehensive income after tax | 36,734,998.42 | 26,305,074.13 | |
| Profit per share (Basic and diluted) | 29 | 1.4705 | 1.0535 |
| Weighted Average Number of Shares (Basic) | 29 | 25,000,000 | 25,000,000 |
| Weighted Average Number of Shares (Diluted) | 29 | 25,000,000 | 25,000,000 |
* Restated amounts due to change in accounting policy (See note 3.1)
The accompanying notes are an integral part of Financial Statements
| Notes | 31.12.2021 | 31.12.2020 Restated* |
1.1.2020 Restated* |
|
|---|---|---|---|---|
| ASSETS | ||||
| Non current assets | ||||
| Property, Plant and Equipment | 4 | 293,677,764.81 | 271,519,477.50 | 274,323,383.77 |
| Right-of-use assets | 5 | 59,230,344.35 | 61,203,389.45 | 62,984,475.38 |
| Investment property | 6 | 734,338.38 | 734,338.38 | 734,338.38 |
| Intangible assets | 7 | 1,376,775.69 | 1,409,534.21 | 665,112.76 |
| Other non-current assets | 8 | 6,197,709.52 | 5,151,580.60 | 1,909,693.36 |
| Deferred tax assets | 9 | 6,945,886.23 | 7,923,631.73 | 8,963,391.47 |
| Total non current assets | 368,162,818.98 | 347,941,951.87 | 349,580,395.12 | |
| Current assets | ||||
| Inventories | 10 | 3,332,545.45 | 3,703,288.52 | 3,195,219.72 |
| Trade Receivables and other receivables | 11 | 19,491,354.67 | 15,659,463.09 | 11,781,648.31 |
| Restricted cash | 12 | 213,267.48 | 213,267.48 | 213,267.48 |
| Cash and cash equivalents | 12 | 134,975,285.73 | 111,354,314.06 | 106,730,436.86 |
| 158,012,453.33 | 130,930,333.15 | 121,920,572.37 | ||
| Non-current assets held for sale | 4 | 183,500.00 | ||
| Total Current Assets | 158,012,453.33 | 131, 113, 833. 15 | 121,920,572.37 | |
| TOTAL ASSETS | 526,175,272.31 | 479,055,785.02 | 471,500,967.49 | |
| EQUITY AND LIABILITIES | ||||
| Equity | ||||
| Share capital | 13 | 50,000,000.00 | 50,000,000.00 | 50,000,000.00 |
| Other reserves | 14 | 84,221,336.11 | 82,383,250.62 | 81,062,544.70 |
| Retained earnings | 141,948,306.54 | 117,051,393.61 | 105,537,025.40 | |
| Total equity | 276,169,642.65 | 249,434,644.23 | 236,599,570.10 | |
| Non-current liabilities | ||||
| Long-term borrowings | 18 | 38,499,999.99 | 44,499,999.99 | 50,499,999.99 |
| Lease liabilities | 5 | 64,128,097.26 | 65,301,685.19 | 66,263,864.40 |
| Government grants | 15 | 38,273,263.52 | 25,468,216.27 | 16, 185, 136. 25 |
| Reserve for staff retirement indemnities | 16 | 10,207,275.80 | 10,513,663.70 | 8,729,499.11 |
| Provisions | 17 | 21,005,319.88 | 16,728,405.67 | 18,400,468.08 |
| Other non-current liabilities | 28 | 952,089.75 | 667,691.29 | 600,000.00 |
| Deferred income | 21 | 34,012,383.84 | 35,073,626.53 | 36,313,356.89 |
| Total Non-Current Liabilities | 207,078,430.04 | 198,253,288.64 | 196,992,324.72 | |
| Current Liabilities | ||||
| Trade accounts payable | 8,168,097.17 | 7,862,340.65 | 7,129,038.48 | |
| Short term of long term borrowings | 18 | 6,000,000.00 | 6,000,000.00 | 6,000,000.00 |
| Lease liabilities | 5 | 1,307,885.46 | 1,236,796.23 | 1,143,207.76 |
| Income tax | 5,236,248.21 | |||
| Accrued and other current liabilities | 20 | 22,214,968.78 | 16,268,715.27 | 23,636,826.43 |
| Total Current Liabilities | 42,927,199.62 | 31,367,852.15 | 37,909,072.67 | |
| Total liabilities | 250,005,629.66 | 229,621,140.79 | 234,901,397.39 | |
| TOTAL LIABILITIES AND EQUITY | 526,175,272.31 | 479,055,785.02 | 471,500,967.49 |
| Notes | Share capital (Note 13) |
Statutory reserve (Note 14) |
Other reserves (Note 14) |
Retained earnings | Total | |
|---|---|---|---|---|---|---|
| Total Equity at January 1, 2020 | 50,000,000.00 | 12,775,515.17 | 68,287,029.53 | 102,390,739.64 | 233,453,284.34 | |
| Change in accounting policy (Note 3.1) | - | - | - | 3,146,285.76 | 3,146,285.76 | |
| Total Equity at January 1, 2020 (restated) | 50,000,000.00 | 12,775,515.17 | 68,287,029.53 | 105,537,025.40 | 236,599,570.10 | |
| Net profit after taxes | - | - | - | 26,336,677.71 | 26,336,677.71 | |
| Total comprehensive income after income taxes | - | - | - | (31,603.58) | (31,603.58) | |
| Total comprehensive income after income taxes | - | - | - | 26,305,074.13 | 26,305,074.13 | |
| Dividends payable 2019 | 19 | - | - | - | (13,470,000.00) | (13,470,000.00) |
| Transfer to reserves | - | 1,320,705.92 | - | (1,320,705.92) | - | |
| Total Equity at December 31, 2020 | 50,000,000.00 | 14,096,221.09 | 68,287,029.53 | 117,051,393.61 | 249,434,644.23 | |
| Total Equity at January 1, 2021 | 50,000,000.00 | 14,096,221.09 | 68,287,029.53 | 117,051,393.61 | 249,434,644.23 | |
| Profit after income taxes | - | - | - | 36,761,709.86 | 36,761,709.86 | |
| Other comprehensive loss after income taxes | - | - | - | (26,711.44) | (26,711.44) | |
| Total comprehensive income after income taxes | - | - | - | 36,734,998.42 | 36,734,998.42 | |
| Dividends payable 2020 | 19 | - | - | - | (10,000,000.00) | (10,000,000.00) |
| Transfer to reserves | - | 1,838,085.49 | - | (1,838,085.49) | - | |
| Total Equity at December 31, 2021 | 50,000,000.00 | 15,934,306.58 | 68,287,029.53 | 141,948,306.54 | 276,169,642.65 |
The accompanying notes are an integral part of Financial Statements
| Notes | 01.01-31.12.2021 | 01.01-31.12.2020 Restated* |
|
|---|---|---|---|
| Cash flows from Operating Activities | |||
| Profit before income taxes | 49,210,993.70 | 36,974,026.70 | |
| Adjustments for: | |||
| Depreciation and amortisation | 27 | 16,626,697.23 | 16,770,223.73 |
| Amortisation of subsidies | 27 | (864,724.92) | (864,724.94) |
| Depreciation right-of-use assets | 27 | 2,129,500.19 | 2,082,696.64 |
| Finance cost for lease liabilities | 26 | 2,433,961.29 | 2,472,612.61 |
| (Gain)/ Loss on disposal of property, plant & equipment and non current assets held for sale | 4,25 | (89,235.16) | 401,296.11 |
| Impairment loss of non-current assets held for sale | 4 | - | 1,676,705.02 |
| Financial expenses, net | 26 | 767,995.65 | 565,964.68 |
| 28 | 284,398.46 | 67,691.29 | |
| Provisions for cash settled share based payments | 28 | 1,821,366.68 | 2,428,514.69 |
| Provision for staff retirement indemnities Other Provisions |
5,159,016.09 | (790,440.68) | |
| Operating profit before working capital changes | 77,479,969.21 | 61,784,565.85 | |
| (Increase)/Decrease in: | |||
| Inventories | 370,743.07 | (508,068.80) | |
| Trade and other receivables | (3,771,890.98) | (59,363.24) | |
| Other long term assets | 8 | (2,518.00) | 1,679,742.68 |
| Increase/(Decrease) in: | |||
| Trade accounts payable Accrued and other current liabilities |
3,075,312.96 | (781,366.23) | |
| Deferred income | 21 | 5,957,469.03 (1,061,242.69) |
(7,311,176.27) (1,239,730.36) |
| Interest paid | (346,009.31) | (295,739.03) | |
| Payments for staff leaving indemnities | 16 | (2,162,000.00) | (685,933.76) |
| Interest income on debtors late payments | 26 | 96,585.78 | 39,650.30 |
| Income taxes paid | 9 | (5,228,338.35) | (10,186,506.81) |
| Net cash from Operating Activities | 74,408,080.72 | 42,436,074.33 | |
| Cash flow from Investing activities | |||
| Grants received | 15 | 11,717,036.41 | 6,766,044.97 |
| Proceeds from the sale of property, plant and equipment and non current asset held for sale | 287,000.00 | - | |
| Capital expenditure for property, plant and equipment and intagible assets | 4 | (40,647,689.68) | (15,548,205.95) |
| Advances for capital expenditure for property, plant and equipment | 8 | (1,931,968.55) | (5,147,718.36) |
| Interest and related income received | 26 | 9,790.90 | 327,917.69 |
| Net cash used in Investing Activities | (30,565,830.92) | (13,601,961.65) | |
| Cash flows from Financing Activities | |||
| Net change in long-term borrowings | 18 | (6,000,000.00) | (6,000,000.00) |
| Interest paid and guarantee fee | (528,363.05) | (1,098,389.92) | |
| Lease payments | 5 | (3,692,915.08) | (3,641,845.56) |
| Dividends paid | 19 | (10,000,000.00) | (13,470,000.00) |
| Net cash used in Financing Activities | (20,221,278.13) | (24,210,235.48) | |
| Net increase in cash and cash equivalents | 23,620,971.67 | 4,623,877.20 | |
| Cash and cash equivalents at the beginning of the year | 12 | 111,354,314.06 | 106,730,436.86 |
| Cash and cash equivalents of the end of the year | 12 | 134,975,285.73 | 111,354,314.06 |
* Restated amounts due to change in accounting policy (See note 3.1) The accompanying notes are an integral part of Financial Statements
"Piraeus Port Authority S.A" (from now on "PPA S.A." or "Company") was established in 1930 as Civil Law Legal Corporation (C.L.L.C.) by Law 4748/1930, which was revised by L.1559/1950 and was ratified by L.1630/1951 and converted into a Societé Anonyme (S.A.) by Law 2688/1999. The Company is located at Municipality of Piraeus, at 10 Akti Miaouli street.
The Company's main objective based on its articles of incorporation is to perform its obligations, conduct its activities and exercise its faculties under or in respect of the concession agreement between the Company and the Hellenic Republic dated 13 February 2002 regarding the use and exploitation of certain areas and assets within the Port of Piraeus, as amended and in force.
The Company may, by way of an illustrative but no means exhaustive list, conduct and be engaged in the following activities:
to use all rights assigned to the Company pursuant to the Concession Agreement and maintain, utilize and exploit all concession assets in accordance with the Concession Agreement;
provide services and facilities to vessels, cargo and passengers, including ship berthing and cargo and passenger handling to and from the port;
install, organize and exploit all kinds of port infrastructure;
undertake any activities related to the port and all other commercial activities associated with or reasonably incidental to the operation of the port of Piraeus;
engage third parties to provide any kind of port services;
award contracts for works;
engage in such further activities as are prudent or customary for the proper conduct of its business and operations in accordance with the Concession Agreement; and
engage in any and all activities, transactions or operations of a type that are generally conducted by commercial corporations.
The main activities of the Company are anchoring services of vessels, handling cargo, loading and unloading services as well as goods storage and car transportation. The Company is also responsible for the maintenance of port facilities, the supply of port services (water, electricity, telephone connection etc. supply), for services provided to travelers (coastal and cruise ships) and for renting space to third parties.
The Company is governed by the principles of L. 4548/2018 as replaced the Company Law 2190/1920 and the founding Law 2688/1999, as amended by Law 2881/2001 and Law 4404/2016.
The duration period of the Company is one hundred (100) years from the effective date of Law 2688/1999. This period may be extended by special resolution of the shareholders general meeting.
The Company is a subsidiary of COSCO SHIPPING (Hong Kong) Limited which controlled 51% of the voting rights, with date of transfer of such rights on 10 August 2016. COSCO SHIPPING (Hong Kong) Limited is 100% held by China Shipping Company Limited, which is 100% held by China COSCO SHIPPING Corporation Limited, a Chinese state-owned company. As a result, China COSCO SHIPPING Corporation Limited, by indirectly holding 100% of COSCO SHIPPING (Hong Kong) Limited, indirectly held 51% of the voting rights in PPA.
On 6 October 2021, an over-the-counter transaction took place where COSCO SHIPPING (Hong Kong) Co., Limited acquired from Hellenic Republic Asset Development Fund S.A. an additional 16% of shares in PPA S.A.As a result, the percentage of voting rights of COSCO SHIPPING (Hong Kong) Co., Limited in PPA S.A. has increased from 51% to 67%. The above transaction has taken place under an Amended Share Purchase Agreement between COSCO SHIPPING (Hong Kong) Co., Limited as Purchaser and Hellenic Republic Asset Development Fund S.A. as Seller, following ratification of an Amendment to the Concession Agreement between the Hellenic Republic and PPA S.A. (Law 4838/2021, Government Gazette 180A/ 01.10.2021).
COSCO SHIPPING (Hong Kong) Co., Limited is 100% held by China Shipping Group Co. Ltd, which is 100% held by China COSCO Shipping Corporation Limited. As a result of the transaction, China COSCO Shipping Corporation Limited indirectly holds 67% of voting rights in PPA S.A.
The Company's number of employees as at December 31, 2021 amounted to 960. At December 31, 2020, the respective number of employees was 991.
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (E.U.). These financial statements have been prepared under the historical cost and going concern basis.
The preparation of financial statements according to the IFRS requires estimates and assumptions to be made by the management, influencing the assets and liabilities amounts, the disclosure of potential receivable and liabilities as at the financial statements date, as well as the revenue and expenditure amounts, during the financial period. Actual results may differ from these estimations. It also requires management to exercise its judgment in the process of applying the accounting policies which have been adopted. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 2(c).
Management continuously assesses the situation and the possible future impacts from the macroeconomic environment in Greece as well as the effects of the pandemic COVID-19 evolution in order to ensure that all necessary actions and initiatives are undertaken to minimize possible consequences for the Company's activities. Management cannot accurately forecast the possible developments; however, based on its assessment as well as the insignificant effect of the pandemic COVID-19 evolution in its financial position and activities, has reached the conclusion that no additional impairment provisions of the financial and non-financial assets of the Company are required on December 31, 2021.
The Board of Directors of the Company approved the financial statements for the year ended at December 31, 2021, on March 14, 2022. The abovementioned financial statements are subject to the final approval of the Annual General Assembly of the Shareholders.
The Company makes estimates and judgments in order to select the most appropriate accounting principles taking into consideration the future outcome of events and transactions. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Estimates and judgments adopted in the preparation of the annual financial statements are consistent with those followed in the preparation of the annual financial statements for the year ended December 31, 2021.
On June 30, 2021, the Company conducted an interim assessment of impairment of the recoverable amount for the sectors that were significantly affected by the impact of the COVID-19 pandemic in the previous year, although in the first half of 2021 there were positive signs of reversal of the negative climate of the pandemic, mainly due to the vaccination program that was implemented in Greece and internationally. Following the mid-term evaluation, the Company proceeded on December 31, 2021 to an impairment assessment of the recoverable amount, evaluating the new data and the significant recovery of the cruise sector, only in the field of activity of the Container Terminal which continued, during the current year, to present losses ,although quite reduced compared to the previous year(Note 2(c) (v)).
(amounts in Euro unless stated otherwise)
In addition, the Company has included disclosures about the impact of the COVID-19 pandemic in the notes:
The estimates and judgments that have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:
(i) Allowance for doubtful accounts receivables and legal cases: Management periodically reassess the adequacy of allowance for doubtful accounts receivable following an expected credit losses ('ECLs') approach. The expected loss rate is assessed on the basis of historical credit losses adjusted to reflect current and forward-looking information. ECLs are based on the difference between the contractual cash flows due and all the cash flows that the Company expects to receive and taking into consideration reports from its legal department. For the allowance of legal cases management assesses the probability of negative outcome, as well as possible payment amounts for their settlement.
(ii) Provision for income taxes: According to IAS 12, income tax provisions are based on estimations as to the taxes that shall be paid to the tax authorities and includes the current income tax for each fiscal year, the provision for additional taxes which may arise from future tax audits and the recognition of future tax benefits. The final clearance of income taxes may be different from the relevant amounts which are included in these financial statements.
(iii) Deferred tax assets on provisions of bad debts: Deferred tax assets are recognized for provisions of bad debts to the extent that it is probable that, based on tax law, the Company has the right to proceed with the tax deduction of the related provision. Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the particular actions that have been taken (seizure, auction, filling of relevant lists to the tax authorities etc.) in order to record a provision for bad debts.
(iv) Depreciation rates: The Company's assets are depreciated over their estimated remaining useful lives. These useful lives are periodically reassessed to determine whether the original period continues to be appropriate. The actual lives of these assets can vary depending on a variety of factors such as technological innovation and maintenance programs.
(v) Impairment of property, plant and equipment: Property, plant and equipment are tested for impairment when there are indicators that the carrying amounts may not be recoverable. When value in use calculations are undertaken, management estimates the expected future cash flows from the asset or cash-generating unit and chooses a suitable discount rate in order to calculate the present value of those cash flows.
The impact of COVID-19 pandemic on specific segments of activity (Note 22) as well as the deterioration of the macroeconomic environment in previous year, led the Company to proceed with an interim assessment of impairment of the recoverable amount for the sectors of activity that were significantly affected and recorded losses due to COVID-19 pandemic impact and deteriorating macroeconomic conditions.
Specifically, in 2020, Company's management assessed the segment report and identified indications of impairment for the container terminal and cruise terminal and has prepared discounted cash flows to calculate the value in use. The value in use was higher than the carrying amount and consequently, no impairment loss was recognized.
The Company, evaluating the new data and the significant recovery of the cruise sector, on December 31 2021, conducted an impairment assessment of the recoverable amount, only in the activity sector of the Container Terminal, which continued in the current year to show losses, although quite reduced compared to previous year.
Regarding the Container Terminal, the recoverable amount of the sector was determined from the value in use which was calculated based on adjusted discounted cash flows and revised business plans of the sector. The pre-tax interest rate used to discount the projected cash flows is 7.1% (31.12.2020: 7.0%). Sensitivity analysis was performed on the positive or negative change in the discount rate and income by 0.25% and 0.50% respectively. Based on the results, the present value exceeds the book value of the tangible fixed assets of the Container Terminal and therefore as at 31 December 2021, no impairment was recorded.
(vi) Contingent liabilities: The existence of contingent liabilities requires from management to make assumptions and estimates continuously related to the possibility that future events may or may not occur as well as the effects that those events may have on the activities of the Company.
(vii) Provision for staff leaving indemnities:The cost for staff leaving indemnities is determined based on actuarial valuations. The actuarial valuation requires management to make assumptions about future salary increases, discount rates, mortality rates, etc. Management, at each reporting date when the provision is re-examined, tries to give its best estimate regarding the above mentioned parameters.
(viii) Leases: The Company during the prior year made a significant estimate to determine the "incremental borrowing rate" that it used to recognize its lease contract with the Greek State because of its special nature. This contract is the Company's main lease agreement (Note 3 (t)).
In addition, the Company during the current year has made judgments and assessments as to whether the sub-lease agreements in which the Company is a lessor relate to operating or finance leases. The contracts to which the Company is a lessor relate mainly to the contract with Piraeus Container Terminal S.A. (Note 3 (t)) as well as contracts related to leased areas to ship repair zone. The management's judgment was based mainly on the duration of the leases.
Concerning the contract with Piraeus Container Terminal S.A., in previous years management concluded that it is an operating lease due to its duration and because the lease does not substantially transfer the risks and rewards of the right of use.
(ix) Share-based payments, cash-settled : At each reporting date, the Company makes estimates to measure the fair value of the share-based benefit obligation on the data to be included in the relevant valuation model as the dividend yield, free interest-risk. In addition, the Management of the Company, in assessing the fair value of the obligation of the specific benefits, makes estimates regarding the performance of its specific financial figures, as well as estimates regarding the performance of the beneficiaries of those benefits.
The Company applies the following accounting policies for the preparation of the accompanying financial statements:
(a) Tangible Assets: Buildings, technical projects and other building installations are valued at acquisition cost less accumulated depreciation and possible impairment provision. The privately owned land, machinery and other equipment, acquired before PPA's conversion into an S.A., 1.6.1999, were valued at deemed cost, arising by the Evaluation Committee of article 9 C.L. 2190/1920, while those acquired afterwards are valued at acquisition cost less accumulated depreciation and possible value impairment provision.
Acquisition cost of a building installation or equipment consists of purchase price include import duties, plus non-refundable purchase taxes as well as any cost required for the asset to become operational. Repairs and maintenance are posted to the financial period in which they were incurred. Significant additions and improvements made at a later stage are capitalized in the relevant asset cost.
Fixed assets constructed by the Company are posted to the self-construction cost which includes subcontractors' fees, materials and technicians' payroll costs involved in the construction (including relevant employer contributions) as well as part of general administration expenses.
Assets under construction include fixed assets under construction and are stated at their cost. Assets under construction are not depreciated until the fixed assets are complete and operational.
(b) Depreciation: Fixed assets are depreciated on a straight line basis according to the following useful lives per fixed asset category:
| Fixed Asset Categories | Useful Life (years) |
|---|---|
| Buildings, technical & port projects | 25-40 |
| Machinery & other equipment | 10-30 |
| Motor Vehicles | 5-12 |
| Floating transportation means | 20-35 |
| Furniture, fixture & fittings | 5-10 |
The residual value, the useful life and the depreciation method of the Company's assets are examined annually and they are adjusted if necessary.
(c) Impairment of non-current financial assets: Property, plant & equipment and intangible fixed assets shall be evaluated for possible impairment loss, when there are indications that the asset's book value is over its recoverable amount. When an asset's book value is over its recoverable amount, the respective impairment loss is posted to the period financial results. An asset's recoverable value is the greater amount between the fair value less cost of disposal and the value in use.
For the purpose of assessing impairment, assets are grouped at the lowest level for which cash flows can be identified separately (cash generating units). Impairment losses recognized in prior periods in nonfinancial assets are reviewed at each reporting date for any reversal.
(d) Investment property: Investment property that includes land and buildings is held by the Company for long-term rental yields and not for own use. Investment property is measured at cost less depreciation and impairment.
The depreciation of buildings is calculated using the straight line method over the buildings' useful life which is 30 years. When the carrying amounts of the investment property exceed their recoverable amounts, the difference (impairment) is charged directly to the statement of comprehensive income. Land is not depreciated.
Transfers are made to investment property when, and only when, there is a change in use, evidenced by the end of owner occupation.
Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell.
The criteria for classifying assets held for sale are deemed to be met only when the sale is highly probable, and the asset or disposal group is available for immediate sale in the present situation. The steps required to complete the sale should indicate that it is unlikely that significant changes will be made to the sale or that the sale decision will be revoked. Management must commit to the plan of sale of the asset and the sale that is expected to be completed within one year from the date of classification.
An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition.
Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets of the Company are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income, and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Company's business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.
Trade receivables that do not contain a significant financing component or for which the Company has applied the practical expedient, are measured at the transaction price as determined under IFRS 15.
In order for a financial asset to be classified and measured at amortised cost or fair value through other comprehensive income, it needs to give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding. This assessment is referred to as the 'solely payments of principal and interest' test and is performed at an instrument level.
The Company's business model for managing financial assets refers to how the Company manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.
Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
For purposes of subsequent measurement, financial assets are classified in four categories:
This category is the most relevant to the Company. The Company measures financial assets at amortised cost if both of the following conditions are met:
• The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows
And
• The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.
The Company's financial assets at amortised cost include trade and other receivables.
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:
• The rights to receive cash flows from the asset have expired
Or
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
• The Company tranfers a financial asset and the tranfer meets the requirements for write-off The Company transfers a financial asset if, and only if, it either:
• transfers the contractual rights to receive the cash flows of the financial asset
Or
• retains the contractual rights to receive the cash flows of the financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients in an arrangement.
When the Company transfers a financial asset, it shall evaluate the extent to which retains the risks and rewards of ownership of the financial asset.
In this case:
• if the Company transfers substantially all the risks and rewards of ownership of the financial asset, the entity shall derecognise the financial asset and recognise separately as assets or liabilities any rights and obligations created or retained in the transfer.
• if the Company retains substantially all the risks and rewards of ownership of the financial asset, the Company shall continue to recognise the financial asset.
• if the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, shall determine whether it has retained control of the financial asset. In this case:
(i) if the Company has not retained control, it shall derecognise the financial asset and recognise separately as assets or liabilities any rights and obligations created or retained in the transfer.
(ii) if the Company has retained control, it shall continue to recognise the financial asset to the extent of its continuing involvement in the financial asset.
The Company recognise an allowance for expected credit losses for all debt instruments not held at fair value through profit or loss. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
For trade and other receivables, the Company apply a simplified approach in calculating expected credit losses. Therefore, the Company does not track changes in credit risk, but instead recognises a loss allowance based on lifetime expected credit losses at each reporting date. For other financial assets, the ECL is based on the 12-month ECL. The 12-month ECL is the portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months after the reporting date. However, when there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL. The Company considered the risk of default, the days past due and the historical credit losses experienced adjusted to reflect current and forward-looking information per debtor to measure the expected credit losses for each individual trade and other receivable balance.
At each reporting date, the Company assess whether the credit risk of a financial asset has increased significantly from the initial recognition. The Company consider a financial asset in default when contractual payments past due over the Company's credit policy. However, in certain cases, the Company may also consider a financial asset to be in default when internal or external information indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
Financial liabilities of the Company are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, trade and other payables.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company's financial liabilities include trade and other payables, loans and borrowings including bank overdrafts.
The measurement of financial liabilities depends on their classification, as described below:
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of comprehensive income when the liabilities are derecognised as well as through the effective interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. The effective interest rate amortisation is included as finance costs in the statement of comprehensive income.
This category generally applies to interest-bearing loans and borrowings. Loans and borrowings are classified as current liabilities unless the Group and the Company has the right to defer settlement for at least twelve months from the date of financial position date.
Trade payables are obligations for goods or services that have been acquired in the ordinary course of business by suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade account payables subsequent to the initial recognition are measured at amortized cost using the effective interest method.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability.The difference in the respective carrying amounts is recognised in the statement of comprehensive income.
Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
(j) Cash on hand and in banks: The Company considers as cash (apart from cash on hand) time deposits and liquid investments maturing in three months from the acquisition date.
The accounting value of deferred tax assets is revised at each balance- sheet date and it is reduced up to the point that it is not likely to have enough taxable profits, where part or all of the deferred tax assets may be set off against. Current income tax receivable and liabilities for current and previous financial years are valued at the amount expected to be paid to Tax Authorities (or be refunded by them), using the tax rates (and tax Laws) in force up to the balance- sheet date.
(m) Revenue Recognition: Revenue is the amount of consideration expected to be received in exchange for transferring promised services to a customer, excluding amounts collected on behalf of third parties (valueadded tax, other sales taxes etc.).
Revenue is recognized when (or as) a performance obligation is satisfied by transferring the control of a promised service to the customer. A customer obtains control of a service if it has the ability to direct the use of and obtain substantially all of the remaining benefits from that service. Control is transferred over time or at a point in time when the service is provided to the customer.
Management has determined that contracts in general comprise of a single performance obligation and prices are fixed, based on stand-alone selling prices derived from price lists. Revenue is recognised at a point in time when the service is provided to the customer.
Revenue arising from services is recognised at a point in the time in the accounting period in which the services are rendered, and it is measured based on stand-alone selling prices derived from price lists.
A receivable is recognised when there is an unconditional right to consideration for the performance obligations to the customer that are satisfied.
A contract asset is recognized when the performance obligation to the customer is satisfied before the customers pays or before payment is due, usually when services are transferred to the customer before the Company has a right to invoice.
A contract liability is recognized when there is an obligation to transfer services to a customer for which the Company has received consideration from the customer (prepayments) or there is an unconditional right to receive consideration before the Company transfers a service (deferred income). The contract liability is derecognized when the promise is fulfilled and revenue is recorded in the profit or loss statement.
The liability for this plan is determined using the projected unit credit method from an independent valuer and includes the present value of accrued services during the year, the interest on future liabilities, the prior service cost and the actuarial gains or losses.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding net interest and the return on plan assets, are recognized immediately in the statement of financial position with a corresponding debit or credit to the actuarial differences reserve through other comprehensive income in the period in which they occur. Remeasurements are not classified to profit or loss in subsequent periods.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Company. Each lease payment is divided between the lease liability and the finance cost. The interest on the lease liability for each period of the lease term is equal to the amount resulting from the application of a fixed periodic interest rate on the outstanding balance of the lease liability. The right of use asset is depreciated over the shorter period between the useful life of the asset and the lease contact duration.
The assets and liabilities arising from the lease are initially valued at present value.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:
The lease payments are discounted using the interest rate implicit in the lease. If that rate can not be determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.
After the commencement date, the lease liability is measured by increasing the carrying amount to reflect interest on the lease liability and by reducing the carrying amount to reflect the lease payments made. The lease liability is remeasured to reflect any reassessment or lease modifications or to reflect revised insubstance fixed lease payments.
The Company elected to use the on-going recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option (shortterm leases), and lease contracts for which the underlying asset is of low value (low-value assets). Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss.
Finally, the Company chose not to separate the non-lease components from lease components, and instead account for each lease component and any associated non-lease components as a single lease component for all classes of underlying assets to which the right of use relates.
Right-of-use assets are measured at cost comprising the following:
• an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories. The lessee incurs the obligation for those costs either at the commencement date or as a consequence of having used the underlying asset during a particular period.
The Company presents the rights of use of the assets of the assets, which are not investment properties, in the account "Right of use assets".
The leases in which the Company is a lessor relate solely to sub-leases and are classified as finance or operating. The Company's sub-lease agreements at 31 December 2021 and 31 December 2020 relate exclusively to operating leases.
Revenue from rental income arising, from operating leases, is accounted for on a straight-line basis over the lease terms.
The Company reflects the future tax impacts of leases and recognises deferred tax. When recognising deferred tax the Company has assessed the lease asset and lease liability together as a single or 'integrally linked' transaction and assessed the net temporary difference.
(q) National Insurance Programs: The obligation for main or supplementary pension provision is covered by the main National Insurance Department (IKA- Social Insurance Institute) which concerns private sector and provides retirement, medical and pharmaceutical services. Each employee is obliged to contribute part of his salary to the National Insurance Department, while part of the total contribution is paid by the Company. On employee retirement the National Insurance Department is responsible for their pension payments. Therefore, the Company has no legal or presumed obligation for future payments according to this program.
The employees of PPA are entitled upon retirement an allowance from the Unified Fund for Supplementary Benefits and Lump-sum Benefits (ΕΤΕΑΕP) according to the statutory provisions of the Fund and the Law N. 2084/92.
For the two welfare sectors, dockworkers and employees of PPA, the granted amount is currently determined on the basis of the provisions of article 35 of Law N.4387 / 12-05-2016 (FEK), considering the average of the total remuneration – without accounting holiday bonus - on which were calculated social insurance contributions for welfare for the five-year period 2009-2013 and with the employee's work year experience until 31/12/2013.
To this amount is added the total of insurance contributions for welfare from 01/01/2014 and afterwards. Every employee is required to contribute a part of his monthly salary to the fund, while part of the total contribution is covered by the Company.
This fund is a legal public company and is responsible for paying the above benefits to employees. Consequently, the Company has no legal or constructive obligation to pay future benefits under this plan.
This concession was agreed for fixed period initial duration of 40 years, beginning on the day the agreement and ending on 13.2.2042. The initial duration is possible to be extended once or several times by Law. And a new written agreement and modification of the 4.1 article of the Concession Agreement.
With the Common Ministry Decision (CMD) no. 8322/3-12-2008, published in Government Paper 2372/21- 11-2008, the Concession Agreement duration has been modified from 40 to 50 years, beginning on the 13/2/2002 (initial signature date) and ending on the respective date of the year 2052.
Management has examined whether the contract for the concession of the exclusive right to use and exploit land, buildings and facilities at the Port of Piraeus Land Zone fall under the scope of the provisions of Interpretation 12. Management concluded that the concession does not fall under the scope of application of Interpretation 12, as it is a lease contract.
Government has received 1% of the Company's consolidated annual income for each of the first 3 years of the concession. The above percentage has increased to 2% of the Company's consolidated annual income after the 3rd year, on the same calculation basis. Based on the new Concession Agreement signed on 24.6.2016 the percentage to Greek State has increased to 3.5% of the Company's consolidated annual income excluding finance income with fixed minimum fee amounted to € 3.5 million.
As of 1/1/2019, due to the adoption of IFRS 16, in the expenses is recorded only the variable amount of the concession fee while the fixed minimum fee amounted to € 3.5 million is included to the right-of-use assets and lease liability (Note 5).
The Company most significant obligations arising from this agreement are:
The Concession Agreement was amended by Law 4838/2021, Government Gazette 180A/ 01.10.2021 and the main points are the following:
The Agreement B. Modification of the original Concession Agreement (OG 52 / 30.03.2009) between the Company and PCT S.A., following the 'Practical Process Amicable Settlement', has been published in the Government Gazette 269 / 24.12.2014.
According to the above, the payment of the guaranteed consideration was suspended until 31.12.2021 and has been replaced by paying only Variable consideration that arises as a percentage on consolidated revenues of PCT SA from the previous contract year.
The calculation of fixed consideration I & II is adjusted regarding the length of exploitation and the corresponding sq.m (Note 21). The concession consideration is calculated and recognized in income for the period in accordance with the terms of the contract and considered as lease contract based on IFRS 16 (Notes 2c and 3p).
The payment of Variable Consideration is performed on a monthly basis in arrears and the payment of the standard exchange every six months in advance (Note 21).
The Company in accordance with IFRS 2 measures the services it obtains and the liability it undertakes at the fair value of the liability. Until the settlement of the liability, the entity shall remeasure the fair value of the liability at the reporting date as well as at the settlement date, and any changes in fair value are recognized in profit or loss for the period. The obligation is measured, initially and at each reporting date until the final settlement, at the fair value of the units on the increase in the share price from the grant date and the respective redemption date, with the application of a valuation model taking into account the terms and conditions under which the units have been granted. The fair value of the long-term reward plan was determined using the Binomial model taking into account the share price, the expected volatility of the share, the dividend yield as well as the free interest rate (Note 28) and the liability is recognized in other long-term liabilities.
(w) Foreign Currency Conversion: All the operations of the Company are all performed in Euro. Transactions made in foreign currencies are converted into Euro using exchange rates effective at transaction date. Receivable and liabilities in foreign currency are adjusted at the financial statements preparation date in order to state the exchange rates effective at that date. Gains or losses arising from these adjustments are included in the Statement of comprehensive income as foreign exchange gains or losses.
The accounting policies adopted in the preparation of the annual financial statements, are consistent with those followed for the year ended December 31, 2020, except for the adoption of new standards and interpretations applicable for fiscal periods beginning at January 1, 2021 as well as the change in the accounting principle regarding the implementation of the final agenda decision under the heading "Allocation of benefits in periods of service in accordance with International Accounting Standard (IAS) 19" (Note 3.1).
New standards, amendments to standards and interpretations: Certain new standards, amendments to standards and interpretations have been issued that are mandatory for periods beginning on or after January 1, 2021. The Company's evaluation of the effect of these new standards, amendments to standards and interpretations is as follows:
The amendment provides lessees (but not lessors) with relief in the form of an optional exemption from assessing whether a rent concession related to COVID-19 is a lease modification. Lessees can elect to account for rent concessions in the same way as they would for changes which are not considered lease modifications.
The amendments complement those issued in 2019 and focus on the effects on financial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform. More specifically, the amendments relate to how a company will account for changes in the contractual cash flows of financial instruments, how it will account for the change in its hedging relationships and the information it should disclose. The Company evaluated the above amendments and concluded that there is no replacement of the old interest rates in contracts of financial elements and liabilities and consequently there is no impact on its financial statements as at 31 December 2021. Regarding the long-term loans held by the Company (Note 18), as at 31 December, the loan is subject to a floating EURIBOR reference rate which has not been transferred to another reference rate.
IFRS 16 (Amendment) 'Covid-19-Related Rent Concessions' (effective for annual periods beginning on or after 1 April 2021).The amendment extends the application period of the practical expedient in relation to rent concessions by one year to cover rental concessions that reduce leases due only on or before 30 June 2022.
IAS 16 (Amendment) 'Property, Plant and Equipment – Proceeds before Intended Use' (effective for annual periods beginning on or after 1 January 2022). The amendment prohibits an entity from deducting from the cost of an item of PP&E any proceeds received from selling items produced while the entity is preparing the asset for its intended use. It also requires entities to separately disclose the amounts of proceeds and costs relating to such items produced that are not an output of the entity's ordinary activities.
IAS 37 (Amendment) 'Onerous Contracts – Cost of Fulfilling a Contract' (effective for annual periods beginning on or after 1 January 2022). The amendment clarifies that 'costs to fulfil a contract' comprise the incremental costs of fulfilling that contract and an allocation of other costs that relate directly to fulfilling contracts. The amendment also clarifies that, before a separate provision for an onerous contract is established, an entity recognises any impairment loss that has occurred on assets used in fulfilling the contract, rather than on assets dedicated to that contract.
IAS 1 (Amendment) 'Classification of liabilities as current or non-current' (effective for annual periods beginning on or after 1 January 2023). The amendment clarifies that liabilities are classified as either current or non-current depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date. The amendment also clarifies what IAS 1 means when it refers to the 'settlement' of a liability. The amendment has not yet been endorsed by the EU.
IAS 1 (Amendments) 'Presentation of Financial Statements' and IFRS Practice Statement 2 'Disclosure of Accounting policies' (effective for annual periods beginning on or after 1 January 2023). The amendments require companies to disclose their material accounting policy information and provide guidance on how to apply the concept of materiality to accounting policy disclosures. The amendments have not yet been endorsed by the EU.
IAS 8 (Amendments) 'Accounting policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates' (effective for annual periods beginning on or after 1 January 2023). The amendments clarify how companies should distinguish changes in accounting policies from changes in accounting estimates. The amendments have not yet been endorsed by the EU.
IΑS 12 (Amendments) 'Deferred tax related to Assets and Liabilities arising from a Single Transaction' (effective for annual periods beginning on or after 1 January 2023). The amendments require companies to recognise deferred tax on transactions that, on initial recognition, give rise to equal amounts of taxable and deductible temporary differences. This will typically apply to transactions such as leases for the lessee and decommissioning obligations. The amendments have not yet been endorsed by the EU.
The amendment addresses which fees should be included in the 10% test for derecognition of financial liabilities. Costs or fees could be paid to either third parties or the lender. Under the amendment, costs or fees paid to third parties will not be included in the 10% test.
The amendment removed the illustration of payments from the lessor relating to leasehold improvements in Illustrative Example 13 of the standard in order to remove any potential confusion about the treatment of lease incentives.
The IFRS Interpretations Committee issued in May 2021 the final decision on the agenda entitled "Distribution of benefits in periods of service in accordance with International Accounting Standard (IAS) 19", which includes explanatory material on how to recognized benefits in periods service on a specific program of defined benefits based to that defined in article 8 of L.3198 / 1955 regarding the provision of compensation due to retirement (the "Program of Fixed Benefits of Labor Law").
Based on the above decision, the way in which the basic principles of IAS 19 were applied in Greece in this regard in the past, and consequently, according to what is defined in the "IASB Due Process Handbook (par. 8.6)", is differentiated, entities that prepare their financial statements in accordance with IFRS are required to amend their accounting policies in this regard.
Until the issuance of the agenda decision, the Company applied IAS 19 by recognized the benefits defined by article 8 of L.3198/1955, L.2112/1920, and its amendment by L.4093/2012 in the period from the recruitment to the completion of 16 years of work following the scale of Law 4093/2012.
The application of this final Decision in the attached financial statements, has as a result the recognition of benefits in the last 16 years until the date of retirement of employees following the scale of Law 4093/2012.
Based on the above, the Management of the Company decided that the implementation of the above final decision has been treated as a change in accounting policy, applying the change retrospectively from the beginning of the first comparative period, in accordance with paragraphs 19-22 of IAS 8. For the distribution of the cumulative actuarial gain/losses the proportional adjustment as at January 1, 2020 of cumulative actuarial gain/losses was implemented.
The effect from the implementation of the final decision for each specific item of the financial statements that is affected is as follows:
| Statement of financial position | 31.12.2020 | Increase/(Decrease) | 31.12.2020 (Restated) |
1.1.2020 | Increase/(Decrease) | 1.1.2020 (Restated) |
|---|---|---|---|---|---|---|
| Deferred tax assets | 9,150,144.04 | (1,226,512.31) | 7,923,631.73 | 9,956,955.39 | (993, 563.92) | 8,963,391.47 |
| Total non current assets | 349,168,464.18 | (1, 226, 512.31) | 347,941,951.87 | 350,573,959.04 | (993, 563.92) | 349,580,395.12 |
| TOTAL ASSETS | 480,282,297.33 | (1, 226, 512.31) | 479,055,785.02 | 472,494,531.41 | (993, 563.92) | 471,500,967.49 |
| Retained earnings | 113,630,568.94 | 3,420,824.67 | 117,051,393.61 | 102,390,739.64 | 3,146,285.76 | 105,537,025.40 |
| Total equity | 246,013,819,56 | 3,420,824.67 | 249,434,644.23 | 233,453,284.34 | 3,146,285.76 | 236,599,570.10 |
| Reserve for staff retirement indemnities | 15,161,000.68 | (4,647,336.98) | 10,513,663.70 | 12,869,348.79 | (4, 139, 849.68) | 8,729,499.11 |
| Total Non-Current Liabilities | 202,900,625.62 | (4,647,336.98) | 198,253,288.64 | 201,132,174.40 | (4, 139, 849.68) | 196,992,324.72 |
| Total liabilities | 234, 268, 477, 77 | (4,647,336.98) | 229,621,140.79 | 239,041,247.07 | (4, 139, 849.68) | 234,901,397.39 |
| TOTAL LIABILITIES AND EQUITY | 480,282,297.33 | (1, 226, 512, 31) | 479,055,785.02 | 472,494,531.41 | (993, 563.92) | 471,500,967.49 |
| Statement of comprehensive income | 01.01-31.12.2020 | Profit Increase/(Decrease) |
01.01-31.12.2020 (Restated) |
|||
| Administrative expenses | (21, 015, 233.52) | 44,356.29 | (20, 970, 877.23) | |||
| Profit before income taxes | 36,929,670.41 | 44,356.29 | 36,974,026.70 | |||
| Income taxes | (10, 515, 552.04) | (121, 796.95) | (10,637,348.99) | |||
| Net profit after taxes | 26,414,118.37 | (77, 440.66) | 26,336,677.71 | |||
| Net other comprehensive income not to be reclassified in profit or loss in subsequent period: |
||||||
| Actuarial losses | (504, 714.67) | 463,131.01 | (41, 583.66) | |||
| Income taxes | 121,131.52 | (111, 151.44) | 9,980.08 | |||
| Other total comprehensive income after tax | (383, 583.15) | 351,979.57 | (31,603.58) | |||
| Total comprehensive income after tax | 26,030,535.22 | 274,538.91 | 26,305,074.13 | |||
| Profit per share (Basic and diluted) | 1,0566 | (0.0031) | 1.0535 |
| Cash flow statement | 01.01-31.12.2020 | Profit Increase/(Decrease) |
01.01-31.12.2020 (Restated) |
|---|---|---|---|
| Cash flows from Operating Activities | |||
| Profit before income taxes | 36,929,670,41 | 44,356,29 | 36,974,026.70 |
| Provision for staff retirement indemnities | 2,472,870.98 | (44, 356.29) | 2,428,514.69 |
In addition, due to the change of accounting policy the profit before income taxes, interest and depreciation (EBITDA) of the year 2020 increased by € 44,356.29 and amounted to € 58,000,799.42 (Published 31.12.2020: € 57,956,443.13).
Property, plant and equipment are analysed as follows:
| Buildings | Machinery & equipment | Motor vehicles and floating docks |
Furniture, fixtures and fittings |
Advances & Assets under construction |
Total | |
|---|---|---|---|---|---|---|
| ACQUISITION COST | ||||||
| Balance January 1, 2020 | 256,400,163.38 | 159,280,463.64 | 44,655,182.32 | 9,709,204.41 | 7,291,245.34 | 477,336,259.09 |
| Additions | 53,632.30 | 687,892.34 | 8,583.20 | 308,393.42 | 15,981,979.65 | 17,040,480.91 |
| Disposals/ write off | - | (2,010,271.46) | - | (626.01) | (60,352.32) | (2,071,249.79) |
| Non current assets held for sale | - | (8,138,347.13) | - | - | - | (8,138,347.13) |
| Transfers | 139,400.00 | 2,063,200.00 | - | 233,270.00 | (2,435,870.00) | - |
| Transfers to intangibles (Note 7) | - | - | - | - | (1,218,076.30) | (1,218,076.30) |
| Balance December 31, 2020 | 256,593,195.68 | 151,882,937.39 | 44,663,765.52 | 10,250,241.82 | 19,558,926.37 | 482,949,066.78 |
| Additions | 338,323.95 | 434,772.07 | 210,590.00 | 236,269.54 | 37,458,079.50 | 38,678,035.06 |
| Disposals/ write off | - | - | - | (1,986,496.34) | (1,986,496.34) | |
| Transfers | 239,484.80 | 1,194,643.80 | - | 620,857.54 | (2,054,986.14) | - |
| Transfers to intangibles (Νote 7) | - | - | - | - | (506,489.45) | (506,489.45) |
| Balance December 31, 2021 | 257,171,004.43 | 153,512,353.26 | 44,874,355.52 | 9,120,872.56 | 54,455,530.28 | 519,134,116.05 |
| DEPRECIATION | ||||||
| Depreciation January 1, 2020 | (88,789,001.99) | (97,338,242.67) | (10,163,957.60) | (6,721,673.06) | - | (203,012,875.32) |
| Depreciation | (7,890,676.52) | (6,303,114.87) | (1,496,534.90) | (583,831.13) | - | (16,274,157.42) |
| Non current assets held for sale | - | 6,278,142.11 | - | - | - | 6,278,142.11 |
| Disposals | - | 1,578,675.35 | - | 626.00 | - | 1,579,301.35 |
| Depreciation December 31, 2020 | (96,679,678.51) | (95,784,540.08) | (11,660,492.50) | (7,304,878.19) | - | (211,429,589.28) |
| Depreciation (Note 27) | (7,902,667.01) | (5,957,847.58) | (1,505,148.44) | (633,330.43) | - | (15,998,993.46) |
| Disposals / write off | - | - | - | 1,972,231.50 | - | 1,972,231.50 |
| Depreciation December 31, 2021 | (104,582,345.52) | (101,742,387.66) | (13,165,640.94) | (5,965,977.12) | - | (225,456,351.24) |
| NET BOOK VALUE | ||||||
| January 1,2020 | 167,611,161.39 | 61,942,220.97 | 34,491,224.72 | 2,987,531.35 | 7,291,245.34 | 274,323,383.77 |
| December 31, 2020 | 159,913,517.17 | 56,098,397.31 | 33,003,273.02 | 2,945,363.63 | 19,558,926.37 | 271,519,477.50 |
| December 31, 2021 | 152,588,658.91 | 51,769,965.60 | 31,708,714.58 | 3,154,895.44 | 54,455,530.28 | 293,677,764.81 |
The PPA S.A. property, plant and equipment are insured with various insurance companies. Insurance covers compulsory insurance of transport vehicles and machinery up to 30.09.2022 as well as general civil liability up to 31.10.2022 and employer liability up to 30.09.2022, property and floating tanks insurance up to 31.10.2022 .
During the year ended December 31, 2021, the total investment in property, plant and equipment amounted to € 38,678,035.06 (31.12.2020 € 17,040,480.91) and related mainly to the purchase of machinery and other equipment as well as port infrastructure. During the current year, the Company made payments of € 40,647,689.68 (01.01.2020-31.12.2020 : € 15,548,205.95) to suppliers related to investments in tangible and intangible fixed assets.
There is no property, plant and equipment that has been pledged as security.
In December 2020, the Company's management approved the disposal of four (4) Quay Cranes with a net book value of € 1,860,205.02. For the above quay cranes, taking into account the valuation that was obtained by an independent appraiser, Company conducted a relevant tender process to sell the assets directly at scrap value of € 185,000.00 with a corresponding cost to sell of € 1,500.00. As the net book value of the quay cranes exceeded the fair value less cost to sell, an impairment loss was recorded amounting to € 1,676,705.02, from the application of IFRS 5. The impairment loss was charged to the "PCT-Concession of Pier II and III" segment and is included in the statement of comprehensive income. The difference of € 183,500.00 between the net book value of the property, plant and equipment and the impairment loss, was reclassified under non-current assets held for sale, applying the provisions of IFRS 5 "Non-current assets held for sale and discontinued operations".
During the current year, the four quay cranes that were recorded in the non-current assets held for sale amounted to € 183,500.00 were sold at the price of € 287,000.00 resulting in an equal reduction in the value of non-current assets available for sale. The profit of the sale amounted to € 103,500 was recognised in the other income of the current year (Note 25).
The recognised right-of-use assets and lease liabilities as at December 31, 2021 and December 31, 2020 are as follows:
| 31.12.2021 | 31.12.2020 | |
|---|---|---|
| Right-of-use assets | ||
| Concession Agreement with Greek State | 58,829,548.32 | 60,782,396.40 |
| Motor vehicles | 400,796.03 | 420,993.05 |
| 59,230,344.35 | 61,203,389.45 | |
| 31.12.2021 | 31.12.2020 | |
| Lease-liabilities | ||
| Current | 1,307,885.46 | 1,236,796.23 |
| Non-current | 64,128,097.26 | 65,301,685.19 |
| 65,435,982.72 | 66,538,481.42 |
The amounts recognized in the statement of comprehensive income and the movement of the right of use of assets and the lease liability from 1 January 2021 to 31 December 2021 as well as the corresponding period last year are as follows:
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
| Right-of-use assets | ||||
|---|---|---|---|---|
| Concession Agreement with Greek State |
Motor vehicles |
Total | Lease liability | |
| Balance 1.1.2021 | 60,782,396.40 | 420,993.05 | 61,203,389.45 | 66,538,481.42 |
| Additions | - | 156,455.09 | 156,455.09 | 156,455.09 |
| Cancellation / modification of contracts | - | - | - | - |
| Depreciation (Note 27) | (1,952,848.08) | (176,652.11) | (2,129,500.19) | - |
| Finance cost (Note 26) | - | - | - | 2,433,961.29 |
| Payments | - | - | - | (3,692,915.08) |
| Balance 31.12.2021 | 58,829,548.32 | 400,796.03 | 59,230,344.35 | 65,435,982.72 |
| Right-of-use assets | ||||
|---|---|---|---|---|
| Concession Agreement | Motor | |||
| with Greek State | vehicles | Total | Lease liability | |
| Balance 1.1.2020 | 62,735,244.48 | 249,230.90 | 62,984,475.38 | 67,407,072.16 |
| Additions | - | 363,601.60 | 363,601.60 | 363,601.60 |
| Cancellation / modification of contracts | - | (61,990.89) | (61,990.89) | (62,959.39) |
| Depreciation (Note 27) | (1,952,848.08) | (129,848.56) | (2,082,696.64) | - |
| Finance cost (Note 26) | - | - | - | 2,472,612.61 |
| Payments | - | - | - | (3,641,845.56) |
| Balance 31.12.2020 | 60,782,396.40 | 420,993.05 | 61,203,389.45 | 66,538,481.42 |
Lease expense less than 12 months for 2021 amounted to € 171,598.90 (31.12.2020: € 204,040.97) and is included in Expenses (Note 24) and specifically in the line "Third-party services".
For the year ended December 31, 2021:
| Land | Buildings | Total | |
|---|---|---|---|
| Net Book Value at January 1, 2021 | 734,338.35 | 0.03 | 734,338.38 |
| Additions | - | - | - |
| Depreciation | - | - | - |
| Net Book Value at December 31, 2021 | 734,338.35 | 0.03 | 734,338.38 |
| December 31, 2021 | |||
| Cost | 734,338.35 | 0.03 | 734,338.38 |
| Accumulated Depreciation | - | - | - |
| Net Book Value | 734,338.35 | 0.03 | 734,338.38 |
For the year ended December 31, 2020:
| Land | Buildings | Total | |
|---|---|---|---|
| Net Book Value at January 1, 2020 | 734,338.35 | 0.03 | 734,338.38 |
| Additions | - | - | - |
| Depreciation | - | - | - |
| Net Book Value at December 31, 2020 | 734,338.35 | 0.03 | 734,338.38 |
| December 31, 2020 | |||
| Cost | 734,338.35 | 0.03 | 734,338.38 |
| Accumulated Depreciation | - | - | - |
| Net Book Value | 734,338.35 | 0.03 | 734,338.38 |
Investment property includes seven land plots and four buildings (commercial spaces and schools) located in Athens and Piraeus.
There is no investment property that has been pledged as security.
The fair value of investment property as at December 31, 2021 amounted to € 5.6 million (December 31, 2020: € 5.3 million) according to the valuation of the independent appraiser 'Mavrakis Certified Appraisers'. The valuation, as a Level 3 (Note 32) fair value measurement is based on comparative assessment method, residual replacement cost method and cost approach depending on the particular characteristics of each property.
Income from rent for the above investment property for the year ended December 31, 2021 and December 31, 2020 amounted to € 19,219.30 and € 18,499.30 respectively and is included in other operating income (Note 25). For the years ended December 31, 2021 and 2020 there were no repair and maintenance costs for investment property.
For the year ended December 31, 2021:
| Software | |
|---|---|
| Net Book Value January 1, 2021 | 1,409,534.21 |
| Additions | 88,455.80 |
| Transfers from assets under construction (Note 4) | 506,489.45 |
| Amortisation of the year (Note 27) | (627,703.77) |
| Net Book Value December 31, 2021 | 1,376,775.69 |
| January 1, 2021 | |
| Cost | 10,460,136.00 |
| Accumulated amortisation | (9,050,601.79) |
| Net Book Value | 1,409,534.21 |
| December 31, 2021 | |
| Cost | 11,055,081.25 |
| Accumulated amortisation | (9,678,305.56) |
| Net Book Value | 1,376,775.69 |
For the year ended December 31, 2020:
| Software | |
|---|---|
| Net Book Value January 1, 2020 | 665,112.76 |
| Additions | 22,411.46 |
| Transfers from assets under construction (Note 4) | 1,218,076.30 |
| Amortisation of the year (Note 27) | (496,066.31) |
| Net Book Value December 31, 2020 | 1,409,534.21 |
| January 1, 2020 | |
| Cost | 9,219,648.24 |
| Accumulated amortisation | (8,554,535.48) |
| Net Book Value | 665,112.76 |
| December 31, 2020 | |
| Cost | 10,460,136.00 |
| Accumulated amortisation | (9,050,601.79) |
| Net Book Value | 1,409,534.21 |
This account consists of the following:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Guarantees to third parties | 323,407.75 | 323,407.75 |
| Car leases guarantees | 77,605.00 | 75,087.00 |
| Advances to suppliers | 5,796,696.77 | 4,753,085.85 |
| Total | 6,197,709.52 | 5,151,580.60 |
In the previous year an advance payment amounting to € 5,147,718.36 was made to a supplier for the initiation of the construction of the project "Cruise Terminal Expansion". According to the signed contract, an amount of 5% on the issued invoices for the execution of the project, is withheld from the initial advance payment, which on December 31, 2020 amounted to € 394,632.51 and the corresponding receivable amounted to € 4,753,085.85. At December 31, 2021, an amount of € 840,996.55 was withheld on the value of the issued invoices and the receivable amounted to € 3,912,089.30.
During the current year, an advance payment of € 941,444.13 was given to a supplier for the start of works for the project "Improvement of Infrastructure of the Shipbuilding and Repair Zone". According to the signed contract, during the execution of the project, a percentage of 5% of the issued invoices has been withheld from the amount of the advance payment which amounts to € 18,212.91 on December 31, 2021 and the corresponding receivable was set at the amount of € 923,231.22.
In addition, during the current year, an advance payment of € 990,524.42 was given to a supplier for the start of works for the project "Expansion of Car Terminal Station (Port of Heraklion)". According to the signed contract, during the execution of the project, a percentage of 5% of the issued invoices has been withheld from the amount of the advance payment which amounted to € 29,148.17 on December 31, 2021 and the corresponding recevable was set at the amount of € 961,376.25.
The income tax rate according to article 22 of law 4646/2019 amounted to 24% for the fiscal year 2020. With Law 4799/2021 the income tax rate was reduced to 22% for the financial income of the fiscal year 2021 and afterward.
The amount of income taxes which are reflected in the statements of comprehensive income are as follows:
| Statement of comprehensive income | 1/1-31/12/2021 | 1/1-31/12/2020 Restated* |
|---|---|---|
| Current income taxes | 11,464,004.35 | 9,587,609.17 |
| Deferred income taxes | 985,279.49 | 1,049,739.82 |
| Total | 12,449,283.84 | 10,637,348.99 |
| Other Comprehensive Income | ||
| Deferred income taxes | (7,533.99) | (9,980.08) |
| Total | (7,533.99) | (9,980.08) |
The payments made for the income tax liability of the current and prior year amounted to € 5,228,338.35 and € 10,186,506.81, respectively.
The reconciliation of income taxes reflected in statements of income and the amount of income taxes determined by the application of the Greek statutory tax rate to pretax income is summarized as follows:
| December 31 | ||
|---|---|---|
| 2021 | 2020 Restated* | |
| Profit pre-tax income | 49,210,993.70 | 36,974,026.70 |
| Income tax calculated at the nominal applicable tax rate in effect | ||
| (2021:22% and 2020: 24%) | 10,826,418.61 | 8,873,766.41 |
| Reversing/ originating temporary differences | 615,064.63 | 1,043,582.58 |
| Tax effect of non-taxable income and expenses not deductible for tax | ||
| purposes | 449,386.78 | 720,000.00 |
| Change in tax rates | 558,413.82 | - |
| Income tax reported in the statements of comprehensive income | 12,449,283.84 | 10,637,348.99 |
* Restated amounts due to change in accounting policy (See note 3.1)
Greek tax laws and regulations are subject to interpretations by the tax authorities. Tax returns are filed annually but the profits or losses declared for tax purposes remain provisional until such time, as the tax authorities examine the returns and the records of the taxpayer and a final assessment is issued. Tax losses, to the extent accepted by the tax authorities, can be used to offset profits of the five fiscal years following the fiscal year to which they relate.
From the financial year 2011 and onwards, all Greek Societe Anonyme and Limited Liability Companies that are required to prepare audited statutory financial statements must in addition obtain an "Annual Tax Certificate" as provided by Article 65Α of L.4174/2013. This "Annual Tax Certificate" must be issued by the same statutory auditor or audit firm that issues the audit opinion on the statutory financial statements. For tax years commencing from 1/1/2016 onwards, the tax compliance report becomes optional according to the provisions of Law 4410/2016. Upon completion of the tax audit, the statutory auditor or audit firm must issue to the entity a "Tax Compliance Report" which will subsequently be submitted electronically to the Ministry of Finance, by the statutory auditor or audit firm.
For the Company, the tax audit for the financial years 2011 to 2020 was performed by the statutory auditors. The tax audit for the current financial year is in progress by the company's statutory auditors. The tax certificate will be granted after the publication of the Financial Statements.
With No.444 and 445 of October 6, 2021 order from the General Directorate of Tax Administration (Audit Authority Center for Large Enterprises) was notified to the Company a tax audit for the period 1/1/2020- 31/7/2021 and 1/1/2016 -31/12/2019, respectively. The audit of tax authorities is in process.
The movement of the deferred tax asset is as follows:
| 31/12/2021 | 31/12/2020 Restated* |
|
|---|---|---|
| Opening balance | 7,923,631.73 | 8,963,391.47 |
| Income taxes (debit) | (985,279.49) | (1,049,739.82) |
| Income taxes credit – Other Comprehensive Income | 7,533.99 | 9,980.08 |
| Closing balance | 6,945,886.23 | 7,923,631.73 |
The movement of deferred tax assets/liabilities as at December 31, 2021 and 2020 is as follows:
| Statement of financial position | Statement of comprehensive income | |||
|---|---|---|---|---|
| 31/12/2021 | 31/12/2020 | 31/12/2021 | 31/12/2020 | |
| Deferred tax assets: | ||||
| Investment property | 144,810.10 | 157,974.66 | (13,164.56) | - |
| Provisions (Doubtful receivables, Legal cases, Staff retirement indemnities) | 8,389,510.89 | 8,425,418.83 | (35,907.94) | (1,096,750.14) |
| Accrued expenses | 107,049.65 | 116,781.43 | (9,731.78) | - |
| Finance lease (IFRS 16) | 1,365,240.44 | 1,280,422.07 | 84,818.37 | 218,998.84 |
| Cash settled share based payments | 209,459.75 | 160,245.91 | 49,213.84 | 16,245.91 |
| Other | 748,242.11 | 864,925.78 | (116,683.67) | 101,568.11 |
| Deferred tax asset | 10,964,312.94 | 11,005,768.68 | (41,455.74) | (759,937.28) |
| Deferred tax liabilities: | ||||
| Depreciation based on useful life | (3,974,745.15) | (3,032,412.49) | (942,332.66) | (281,894.31) |
| Accrued income | (43,681.56) | (49,724.46) | 6,042.90 | 2,071.85 |
| Deferred tax liability | (4,018,426.71) | (3,082,136.95) | (936,289.76) | (279,822.46) |
| Deferred tax asset | 6,945,886.23 | 7,923,631.73 |
Deferred tax recognized in the statement of comprehensive income (977,745.50) (1,039,759.74)
The deferred tax asset balance from provisions includes the relevant deferred tax on the provision on doubtful receivables which has been established mainly in previous years (before 2016) when the Company was operating under specific legislation Law 1559/1950 and Law 2688/1999. The Company believes that they have taken the ultimate possible measure for collecting a long outstanding receivable balance, part of which has been assigned to tax authority for collection. For such doubtful receivable balances of € 24.1 million referring to € 2.6 million deferred tax asset recorded in the Company book, the Company intends to utilize this deferred asset writing off these balances in the future. That intention was declared in a notice letter to the Ministry of Finance. A response is critical for any future action to be determined by the Company.
Inventories are analysed as follows:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Consumable materials | 441,426.91 | 440,605.94 |
| Spare parts and equipment | 2,891,118.54 | 3,262,682.58 |
| Total | 3,332,545.45 | 3,703,288.52 |
Inventory consumption cost for the year ended December 31, 2021 and 2020 amounted to € 2,820,801.67 and € 1,953,467.68 respectively (Note 24). Consumables include an amount of € 65,239.12 (31.12.2020: € 81,361.18) related to write off of obsolete tools.
There was no inventory devaluation to their net realisable value.
This account is analysed as follows:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Trade Debtors | 51,782,819.58 | 48,811,422.55 |
| Minus: Provision for doubtful debts | (40,830,048.47) | (39,885,944.27) |
| Total trade receivables | 10,952,771.11 | 8,925,478.28 |
| Personnel loans | 391,994.51 | 381,765.94 |
| Prepaid Expenses | 1,342,878.91 | 1,247,232.97 |
| Income tax advance | - | 888,394.50 |
| Advances to suppliers | 1,592,594.35 | 1,303,319.16 |
| Other receivable | 2,080,663.58 | 2,073,731.79 |
| Grant receivable | 5,334,495.75 | 3,381,759.99 |
| for other receivables and Minus: Provision |
||
| advances to suppliers | (2,204,043.54) | (2,542,219.54) |
| Total other receivables | 8,538,583.56 | 6,733,984.81 |
| Total trade and other receivables | 19,491,354.67 | 15,659,463.09 |
Personnel loans: The Company provides interest-free loans to its personnel. The loan amount per employee does not exceed approximately € 3,000.00 and loan repayments are made by withholding monthly instalments from the employee salaries.
Other receivable: Other receivable include the compulsory seizure of Piraeus municipality amounted to € 238,838.62 (2020: € 238,838.62), as well as receivable from third parties and municipality of Drapetsona amounted to € 1,841,824.96 (2020: € 1,834,893.17).
Advance tax payment: At 31 December 2020, the Company had a receivable of € 888,394.50 while at 31 December 2021 the income tax payable amounts to € 5,236,248.21.
Grant receivable: The grant receivable for the current and previous period concerns the outstanding balance from the Attica Regional Fund of the approved grant for the project "Expansion of the Passenger Port for cruise ship "(Note 15).
The movement of the allowance for doubtful trade receivables is analysed as follows:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Beginning balance | 39,885,944.27 | 40,114,312.20 |
| Provision for the year | 1,220,277.88 | 711,989.79 |
| Provision used | (276,173.68) | (940,357.72) |
| Ending balance | 40,830,048.47 | 39,885,944.27 |
The used provision in the current year of € 276,173.68 and € 940,357.72 (in prior year) relates to the writeoff of customers' debt based on a decision of the Board of Directors and for which a provision for doubtful debts had been made in previous years.
Trade receivables are normally settled on 10 days' terms. A single customer represents 51% of the Company's total revenue (Note 31) (2020: 54 %). The outstanding amount of this customer as at December 31, 2021 amounted to € 2.6 million (2020: € 2.0 million )(Note 31).
For trade receivables and other receivables, the Company has calculated estimated credit losses (ECLs) based on lifetime expected credit losses. Taking into consideration that trade receivables are normally settled within 10 days from the issuance of the invoice, the risk of default and the expected loss rate of 0.5% has been determined by management whereas for all balances that are outstanding for more than 10 days, the Company has considered the risk of default, the days past due and the historical credit losses experienced adjusted to reflect current and forward-looking information per debtor to measure the expected credit losses for each individual trade receivable balance. In the current COVID-19 pandemic impacted environment, the Company is actively monitoring the recoverability of trade receivables and ensures that the loss allowance recorded reflects, on a timely basis management's best estimate of potential losses in compliance with IFRS 9.
The ageing analysis of trade receivables (net of ECLs) is as follows:
| December 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| 0-10 days | 9,052,399.02 | 6,390,613.28 | ||
| 10-90 days | 188,102.46 | 188,937.19 | ||
| 91-180 days | 208,328.53 | 295,434.13 | ||
| 181-365 days | 280,218.29 | 328,851.06 | ||
| >365 days | 1,223,722.81 | 1,721,642.63 | ||
| Total | 10,952,771.11 | 8,925,478.28 |
The ageing analysis of receivables past due more than 365 days applies to claims for which the Company has filed appeals or taken actions for their collectability. Management and Legal Department estimate that the final court decisions and the other actions will be in favour of the Company .
The movement of the allowance for doubtful other receivables and advances to suppliers is analysed as follows:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Beginning balance | 2,542,219.54 | 2,204,043.54 |
| Provision for the year | - | 338,176.00 |
| Reversal of provision | (338,176.00) | - |
| Ending balance | 2,204,043.54 | 2,542,219.54 |
The net impairment losses on financial assets are analysed as follows:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Impairment losses | ||
| Movement in loss allowance for trade receivables | 1,220,277.88 | 711,989.79 |
| for i n loss allowance other receivables and Movement advances to suppliers |
(338,176.00) | 338,176.00 |
| Net impairment losses on financial assets | 882,101.88 | 1,050,165.79 |
Cash and cash equivalents are analyzed as follows:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Cash in hand | 28,994.51 | 37,747.04 |
| Cash at banks | 134,946,291.22 | 111,316,567.02 |
| Total | 134,975,285.73 | 111,354,314.06 |
| Restricted cash | 213,267.48 | 213,267.48 |
| Total | 135,188,553.21 | 111,567,581.54 |
Cash at banks earns interest at floating rates based on monthly bank deposit rates. Interest earned on cash at banks and time deposits is accounted for on an accrual basis and for the year ended December 31, 2021, amounted to € 9,790.90 (31.12.2020: € 327,917.69) and is included in the financial income (Note 26).
The remaining restricted cash of € 213,267.48 relates to Company's freezed deposits, in favor of a municipality against which there are pending trials.
Share capital amounts to € 50,000,000.00 is fully paid up and consists of 25,000,000 ordinary shares, of nominal value € 2.00 each. There are neither shares which do not represent Company's capital nor bond acquisition rights.
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Reserves are analysed as follows:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Statutory reserve | 15,934,306.58 | 14,096,221.09 |
| Special tax free reserve L. 2881/2001 | 61,282,225.52 | 61,282,225.52 |
| Specially taxed income reserve | 728,128.36 | 728,128.36 |
| Taxed reserve L. 4172/2013 art. 72 | 6,087,915.56 | 6,087,915.56 |
| Taxed reserve based on general provisions | 188,760.09 | 188,760.09 |
| Total | 84,221,336.11 | 82,383,250.62 |
Statutory reserve: Under the provisions of Greek corporate Law, companies are obliged to transfer at least 5% of their annual net profit, as defined, to a statutory reserve, until the reserve equals the 1/3 of the issued share capital. The reserve is not available for distribution throughout the Company activity.
Special tax free reserve Law 2881/2001: This reserve was created during the conversion of the Company to a Societé Anonyme. The total Company's net shareholder funds (Equity) was valued, by the article 9 Committee of the Codified Law 2190/1920, at € 111,282,225.52, € 50,000,000.00 out of which was decided by Law 2881/2001 to form the Company share capital and the remaining € 61,282,225.52 to form this special reserve.
Untaxed or specially taxed income reserve: This is interest income which was either not taxed or taxed by withholding 15% tax at source. In case these reserves are distributed, they are subject to tax on the general income tax provision basis. Based on Article 72 par.11 of Law 4172/2013 those reserves are subject (from 1 January 2014) to an independent taxation at a rate of 19%. On December 30th, 2014, the Company proceeded to the taxation of those reserves which amounted to € 1,428,029.58. After the tax deduction created the taxed reserves of Article 72 N.4172 / 2013 and the taxed reserve with the general provisions amounting to € 6,087,915.56 and € 188,760.09 respectively.
The movement of the account is analyzed as follows:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Opening | 38,242,578.05 | 28,094,773.09 |
| Approved grant in current year | 13,669,772.17 | 10,147,804.96 |
| Closing | 51,912,350.22 | 38,242,578.05 |
| Accumulated amortization | (13,639,086.70) | (12,774,361.78) |
| Net Book Value | 38,273,263.52 | 25,468,216.27 |
Grants received up to December 31, 2011 relate to the requirements of the Olympic Games of 2004 (€ 11,400,000.00) and on the construction of infrastructure for the OSE S.A. port station (€ 3,700,000.00).
Also, a grant of € 3,653,518.80 has been received in 2012 and is divided in a) € 2,536,168.80, which relates to the widening of the quay Port Alon and b) € 1,117,350.00 for the construction of new dock at the area of Agios Nikolaos in the central port of Piraeus, under the operational program "Improvement of accessibility-energy" of the Attica region. Finally, a grant amounted to € 9,901,740.45 has been received in December 2013 and relates to the operational program "Support Accessibility" of the Ministry of Infrastructure, Transport and Network and in particular, in two projects which have been completed. According to a decision of Attica Region issued during 2017, it was decided to return the amount of € 13,735.39 for the correction of the subsidy for the project "Widening of the quay Port Alon".
Moreover, according to a decision of Attica Region issued during 2018, it was decided to return the amount of € 546,750.77 for the correction of the subsidy for the project "Construction of new dock of Ag. Nikolaos".
During the previous year, the Attica Regional Fund approved a grant of € 10,147,804.96 for the project "Expansion of the Passenger Port for the service of the cruise" and the amount of € 6,766,044.97 was collected. The above amount concerned two payment orders for the project of the expansion of the Themistocleous pier and the construction of a new Pier on the south side of the central port, with a total approved amount of € 97,720,853.49 from the ATPIC WPP (NSRF 2013 - 2020) according to the decision Α.Π.403 / 11-2-2020.
During the current year, a grant of € 13,669,772.17 was approved by the Attica Regional Fund for the project "Expansion of the Passenger Port for the service of the cruise", which is under execution. As at December 31, 2021 the amount of approved grant of € 5,334,495.75 (Note 11) is pending (31.12.2020: € 3,381,759.99), while in the current year the amount of € 11,717,036.41 was received (31.12.2020: € 6,766,044.97).
Grants are considered as future revenue and are recognized in revenue at the same rate at which the subsidized assets are depreciated (note 27) . Grants related to assets under execution are not amortized until the fixed asset is completed and available for its intended productive operation.
There are no other obligations regarding the received grants.
The relevant provision movement for the financial year ended on December 31, 2021 and the financial year ended on December 31, 2020 is as follows:
| Liability in Statement of Financial Position 1.1.2020 Restated* | 8,729,499.11 |
|---|---|
| Current cost of employment | 1,076,300.86 |
| Past service costs | 1,243,095.09 |
| Interest cost on liability | 109,118.74 |
| Actuarial (gain)/loss on liability due to financial assumptions | 283,523.68 |
| Actuarial gain/loss on liability due to experience | (241,940.02) |
| Benefits paid | (685,933.76) |
| Liability in Statement of Financial Position 31.12.2020 | 10,513,663.70 |
| Current cost of Employment | 1,742,514.20 |
| Interest cost on liability | 78,852.47 |
| Actuarial gain/(loss) on liability due to financial assumptions | 83,167.96 |
| Actuarial gain/(loss) on liability due to experience | (48,922.53) |
| Benefits paid | (2,162,000.00) |
According to the Collective Agreement Port Workers (dated 1/7/2019, article 6,) an employee who fulfills retirement conditions, leaving the Company, is entitled to a retirement allowance of € 30,000.
According to the Collective Agreement, employees of PPA SA (effective from 1/11/2020, article 8), employee who fulfills retirement conditions, leaving the Company, is entitled to a retirement allowance of € 34,000.
According to the SAE of Supervisors / Planners of PPA SA (effective from 1/4/2019, article 8,) an employee who fulfills retirement conditions, leaving the Company is entitled to receive a retirement allowance of € 30,000.
The principal actuarial assumptions used are as follows:
| 2021 | 2020 | |
|---|---|---|
| Discount Rate | 0.60% | 0.75% |
| Salaries increase | 0.00% | 0.00% |
| Average annual growth rate of long-term inflation | 1.80% | 1.50% |
A quantitative sensitivity analysis for significant assumption as at December 31, 2021 and December 31, 2020 is as shown below:
| 2021 Discount rate |
|||
|---|---|---|---|
| 0.50% | 0.50% | ||
| Sensitivity Level | increase | decrease | |
| Impact on defined benefit obligation | (273,202.80) | 284,965.20 | |
| 2020 | Discount rate | ||
| 0.50% | 0.50% | ||
| Sensitivity Level | increase | decrease | |
| Impact on defined benefit obligation | (283,523.68) | 295,931.58 |
The expected cash flows in the future years are analyzed as follows:
| 2021 | 2020 Restated* | |
|---|---|---|
| Within the next 12 months (next annual reporting period) | 1,382,105.00 | 1,585,908.00 |
| Between 2 and 5 years | 5,221,132.00 | 4,780,513.00 |
| Between 5 and 10 years | 8,398,595.00 | 9,777,663.00 |
| Beyond 10 years | 12,348,043.00 | 12,927,917.00 |
| Total expected payments | 27,349,875.00 | 29,072,001.00 |
The average duration of the defined benefit plan obligation at the end of the year is 5,50 years (2020:5,55 years).
The Company has made provisions for various pending legal cases as at December 31, 2021 amounting to € 21,005,319.88,(2020: € 16,728,405.67) relating mainly to claims from personnel and other third parties.
The movement of the provision for legal claims by third parties is as follows:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Opening balance | 16,728,405.67 | 18,400,468.08 |
| Charge of the year (Note 24) | 4,389,258.57 | 2,302,471.03 |
| Provision used | (87,925.94) | (400,666.16) |
| Reversal of provision (Note 24) | (24,418.42) | (3,573,867.28) |
| Closing balance | 21,005,319.88 | 16,728,405.67 |
The current's year provision relates to legal cases of employees, Greek State and other third parties amounting to € 1,734,308.57, € 2,000,000.00 and € 654,950.00 respectively (31.12.2020: € 1,089,922.20, € 0 and € 1,212,548.83 respectively) .The reversal of the provision relates to legal cases which have been reassessed by the Company's legal department based on current developments or finalized in favor of the Company. The provision used relates to legal cases which have been finalised against the Company and a provision has been made in prior years.
The long term portion of borrowings as at December 31, 2021 and December 31, 2020 respectively is as follows:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Total of Long term borrowings | 44,499,999.99 | 50,499,999.99 |
| Minus: | ||
| Short term portion of Long term borrowings | 6,000,000.00 | 6,000,000.00 |
| Long term portion | 38,499,999.99 | 44,499,999.99 |
Balance included in the following loans between the Company and the European Investment Bank:
1. Loan of € 35,000,000.00 for the construction of Container Terminal Pier I, issued on 30/7/2008.
The repayment of the loan will be in thirty (30) semi-annual installments, payable from December 15, 2013 up to and including June 15, 2028. As amended in October 2, 2017 the loan bears an annual interest rate, that is the sum of a fixed interest rate and a margin of 0.25% which is payable quarterly.
From this contract there are obligations and restrictions for the Company, the most important of which are summarized as follows: (i) to submit the annual financial statements within 1 month of publication along with a Certificate of Compliance audited by a recognized firm of certified auditors, and (ii) to hold throughout the duration of the loan and until fully repaid, the following financial ratios, calculated on annual financial statements, audited by certified auditors, for each financial year:
As at 31 December 2021 the Company was in compliance with the above financial ratios.
The balance of the loan as at 31 December 2021 amounted to € 15,166,666.61 (31.12.2020: € 7,499,999.95).
2. Loan of € 55,000,000.00 for the construction of Container Terminal Pier I issued on the 10/02/2010.
The repayment of the loan will be in thirty (30) semi-annual installments, payable from 15 June 2015 up to and including 15 December 2029. As amended in October 2, 2017 the loan bears an annual interest rate, that is the sum of a floating EURIBOR interest rate and a margin of 0.25% which is payable quarterly.
The balance of the loan as at 31 December 2021 amounted to € 29,333,333.38 (31.12.2020: € 33,000,000.04).
From this contract there are obligations and restrictions for the company, the most important of which are summarized as follows: (i) to submit the annual financial statements within 1 month of publication along with a Certificate of Compliance audited by a recognized firm of certified auditors, and (ii) to hold throughout the duration of the loan and until fully repaid, the following financial ratios, calculated on annual financial statements, audited by certified auditors, for each financial year:
As at 31 December 2021 the Company was in compliance with the above financial ratios.
On September 26, 2017 a Guarantee Issuance Facility Agreement was signed between the Company and the ''Export Import Bank of China'', in respect of the issuance of guarantees of an initial amount of € 75,074,999.99 to support the loans from the European Investment Bank outstanding debt. The amount of guarantee is variable and is based on an amortization table linked to the total outstanding balance of both loans agreements. The guarantee bears an issuance fee of zero point six per cent (0.6%) of the relevant maximum guarantee amount. This fee paid for the year ended December 31, 2021 amounted to € 457,619.66 (31 December 2020 € 458,873.42) and is included in financial expenses (Note 26).
For the year ended December 31, 2021 and 2020, total interest expense on long-term borrowings, amounted to € 70,743.39 and € 178,919.81 respectively and is also included in financial expenses (Note 26).
On November 8, 2019 a loan agreement of € 100,000,000.00 was signed between PPA S.A. and the European Investment Bank. The purpose of the loan is to finance the projects relating to the expansion and upgrading of many areas of Piraeus Port, such as the extension of the car terminal, improving the infrastructure of the ship repair zone, the development of a new Iogistics Port Center, the construction of a new cruise service facility, the acquisition of new container terminal equipment and the renovation-upgrading of other port and electromechanical installations. Guarantor of P.P.A. regarding the loan is the Export-Import Bank of China (based on contract 14/11/2019) and a letter of guarantee € 105 million will be issued upon the draw down of the loan. As at December 31, 2021 and 2020 the Company has not drawn down any amount.
The Company has a credit line available for € 50,000,000.00 with National Bank of Greece valid until December 31, 2022. The credit line bears annual variable interest rates of Euribor, plus margin 2.9%. The Company has not utilised any amount under the overdraft agreement.
Dividends related to fiscal year 2020, paid in 2021: The Annual General Meeting of the Company, which took place on July 15, 2021, approved the proposal of the Board of Directors proposed for the distribution of dividend for the fiscal year 2020 amounted to € 10,000,000.00 or € 0.4000 per share. The dividend is subject to withholding tax at the corresponding rate provided by income tax. The dividend for the fiscal year 2020 was paid on July 30, 2021.
Dividends proposed for the fiscal year 2021: On March 14, 2022 the Board of Directors proposed for the fiscal year 2021 a dividend distribution amounting to € 15,700,000.00 or € 0.6280 per share. The final authorization is subject to the approval by the Annual General Assembly.
This account is analyzed as follows:
| 31/12/2021 | 31/12/2020 | |
|---|---|---|
| Taxes payable (except Income taxes) | 3,333,511.76 | 2,709,518.61 |
| National insurance and other contribution | 2,225,157.43 | 3,234,001.17 |
| Salaries Payable | 882,015.42 | 658,960.07 |
| Concession Agreement Liability | 2,062,798.16 | 1,331,551.38 |
| Other creditors | 2,811,941.36 | 713,878.03 |
| Other Short Term Obligations | 871,325.32 | 1,372,644.95 |
| Regulatory Authority for Ports | 477,130.41 | 415,235.58 |
| Greek State committed dividends | 804,000.00 | 804,000.00 |
| Customers' payment in advance | 5,847,083.54 | 3,767,972.17 |
| Provision for employee's voluntary retirement incentives | - | 256,500.00 |
| Accrued expenses | 2,900,005.38 | 1,004,453.31 |
| Total | 22,214,968.78 | 16,268,715.27 |
Taxes Payable: Current period's amount consists of: a) Value Added Tax € 1,685,968.50 (31.12.2020: € 1,005,387.62, b) Employee withheld income tax € 1,290,539.49 (2020: € 1,379,371.83) and c) other third party taxes € 357,003.77 (2020: € 324,759.16).
Concession Agreement Liability: The liability relates to the variable amount of annual fee with an equal debit in the expense account "Concession agreement fee" (Note 24) and excludes the fixed minimum annual fee for the current period of € 3,500,000.00. Regardless of the application of IFRS 16, the Company's contractual obligation to pay to the Greek State as at 31 December 2021 amounted to € 5,562,798.16 (31 December 2020: € 4,831,551.38) and was calculated as a percentage of 3.5% on the total revenue of the current year excluding financial income.
Payment in advance: The Company receives payments in advance for services rendered on an ordinary basis, which are then settled on a regular basis. Customer payments in advance amounted to € 5,847,083.54 (31.12.2020: € 3,767,972.17).
On April 27, 2009 "PCT S.A." paid € 50,000,000.00 as a one-off consideration for the use of port facilities of Piers II and III of SEMPO of PPA (N.3755/2009). From the aforementioned amount, € 2,930,211.41 was offset with the cost of supplies and parts provided by PCT S.A., while the remaining amount of € 47,069,788.59 is amortized over the concession period. On August 2009, PPA S.A received from PCT S.A. three letters of guarantee amounted to € 61.4 million, € 21.0 million and € 42.0 million respectively for the concession agreement, the upgrade of PIER II and the construction of PIER IIΙ respectively. The letter of guarantee of € 21.0 million has been expired and returned in 2013. On September 2016, the last letter of guarantee of € 42.0 million, was reduced by 50% to € 21.0 million, upon completion of the project construction of the eastern side of PIER III. The letter of guarantee of € 61.4 million from China Development Bank was replaced with an equal letter of guarantee of COSCO SHIPPING Port Ltd. and came into effect on 26.8.2019. In addition, the Company has received from PCT S.A. letter of guarantee for the construction of the petroleum pier of € 950,000.00, which was reduced by 50% to € 475,000.00. On December 29, 2020, the letter of guarantee from PCT S.A with the amount of € 42.0 million (which had been reduced by 50% to 21.0 million) and the letter of guarantee with the amount € 475,000.00 were returned. On the same date the Company received a letter of guarantee of € 663,000.00 regarding the rest of the construction of the west side of Pier III . The initial concession period was thirty (30) years, which was increased to thirty five (35) years, after the completion the construction of the port infrastructure on the east side of Pier III.
Following the transfer of the cumulative amount € 16,474,426.00 on revenue of the years 2009 until 2021 the new balance at December 31, 2021 amounted to € 30,595,362.59 (December 31, 2020: € 31,940,213.69).
b) The Company receives Fixed Annual Consideration from PCT S.A based on the length and surface of the land under concession. Fixed Annual Considerations is invoiced in advance in April and October of each fiscal year. As a result the company has recognized as deferred revenue of € 3,160,771.97 and € 3,099,349.84 as at December 31, 2021 and December 31, 2020 respectively.
| Balance December 31, 2019 | 36,300,733.27 |
|---|---|
| Less: Amortization of the year – Initial concession | (1,344,851.10) |
| Less: Deferred Fixed Annual Consideration for the period 1.1.2020-31.3.2020 realized | (3,015,668.46) |
| Plus: Deferred Fixed Annual Consideration for the period 1.1.2021-31.3.2021 | 3,099,349.84 |
| Balance December 31, 2020 | 35,039,563.55 |
| Less: Amortization of the year – Initial concession | (1,344,851.10) |
| Less: Deferred Fixed Annual Consideration for the period 1.1.2021-31.3.2021 realized | (3,099,349.84) |
| Plus: Deferred Fixed Annual Consideration for the period 1.1.2022-31.3.2022 | 3,160,771.97 |
| Balance December 31, 2021 | 33,756,134.58 |
c) Additionally as at December 31, 2021, deferred income includes an amount of € 256,249.26 (31.12.2020: € 34,062.98) which relates to the deferred income from rentals.
The Company operates in Greece, regardless of the fact that its clientele includes international companies. Additionally, the Company has no other commercial or industrial activities other than the provision of services solely in the Port area and does not have income or assets from foreign customers (based on the geographical area in which they operate).
The port of Piraeus is a port complex activity, putting work in many areas of port activity, such as containers Car-terminal, shipping, cruise, Ro-Ro, ship repairing, environmental and logistics services.
It is the main port of coastal connecting mainland Greece and the islands, the main cruise port service in the country, the main port container, the main car – terminal port of the country.
PPA S.A. provides all the requested port services: water, fuel oil, solid and liquid slot tankers, jack residual oil, electricity, fiber optics and internet, victuals, repairs, environmental services and is fully connected to all activities with modern computer systems.
The management of PPA S.A. monitors at the level of results of the above activities and takes business decisions based on the implemented internal management information system.
Based on the above and in accordance with the provisions of IFRS 8, the Company has determined to disclose the following segments:
The other segments include activities representing less than 10 % of total revenue and profit in all segments and therefore are not disclosed as separate operating segments.
The Company level includes revenues and expenses that are not allocated by operating segment because management monitors them at entity level.
Management does not make business decisions and does not monitor periodically the assets and liabilities of the business sectors and for this reason does not make the relevant disclosures as required by the provisions of IFRS 8.
| CONTAINER TERMINAL | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 31.12.2021 | CONTAINER TERMINAL OPERATION |
CONSESSION ARRANGEMENT PIER II&III |
CAR TERMINAL | COASTING | CRUISE | SHIP REPAIRING (TANKS AND DOCK) |
OTHER SEGMENTS |
COMPANY | TOTAL |
| Revenues | 29,608,551.07 | 70,097,734.50 | 14,126,608.03 | 9,443,942.88 | 9,511,906.83 | 13,374,152.82 | 8,027,075.85 | - | 154,189,971.98 |
| Cost of sales | (36,500,686.94) | (3,820,393.81) | (8,823,798.19) | (4,506,803.67) | (5,720,804.12) | (10,545,122.02) | (7,458,008.43) | - | (77,375,617.18) |
| Gross profit/(loss) | (6,892,135.87) | 66,277,340.69 | 5,302,809.84 | 4,937,139.21 | 3,791,102.71 | 2,829,030.80 | 569,067.42 | - | 76,814,354.80 |
| Other expenses | (4,141,290.56) (10,129,643.94) | (1,836,348.85) | (975,351.12) | (543,887.07) | (2,187,818.53) | (1,384,110.87) | (7,950,071.44) | (29,148,522.38) | |
| Other income | - | - | - | - | - | 1,342,903.70 | 2,094,229.78 | 1,309,984.74 | 4,747,118.22 |
| Financial income | - | - | - | - | - | - | - | 106,376.68 | 106,376.68 |
| Financial expenses | (830,593.66) | (1,408,497.30) | (167,872.67) | (109,658.86) | (119,813.12) | (164,306.31) | (118,113.14) | (389,478.56) | (3,308,333.62) |
| Profit/ (loss) before income taxes | (11,864,020.09) | 54,739,199.45 | 3,298,588.32 | 3,852,129.23 | 3,127,402.52 | 1,819,809.66 | 1,161,073.19 | (6,923,188.58) | 49,210,993.70 |
| Income taxes | - | - | - | - | - | - | - | (12,449,283.84) | (12,449,283.84) |
| Net profit / (loss) after taxes | (11,864,020.09) | 54,739,199.45 | 3,298,588.32 | 3,852,129.23 | 3,127,402.52 | 1,819,809.66 | 1,161,073.19 | (19,372,472.42) | 36,761,709.86 |
| Depreciation and amortisation (inclunding right-of | |||||||||
| use assets depreciation) | 7,068,083.75 | 3,343,145.33 | 939,605.82 | 1,167,757.06 | 1,428,795.15 | 2,313,100.31 | 1,630,741.96 | 243.12 | 17,891,472.50 |
| (Losses)/Earnings before Interest, Taxes, | |||||||||
| Depreciation and Amortisation | (3,965,342.68) | 59,490,842.08 | 4,406,066.81 | 5,129,545.15 | 4,676,010.79 | 4,297,216.28 | 2,909,928.29 | (6,639,843.58) | 70,304,423.14 |
| CONTAINER TERMINAL | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 31.12.2020 Restated* | CONTAINER TERMINAL OPERATION |
CONCESSION ARRANGEMENT PIER II&III |
CAR TERMINAL | COASTING | CRUISE | SHIP REPAIRING (TANKS AND DOCK) |
OTHER SEGMENTS |
COMPANY | TOTAL |
| Revenues | 24,303,482.47 | 66,493,707.37 | 11,069,491.04 | 8,274,978.93 | 2,002,255.52 | 13,786,557.81 | 6,971,750.75 | - | 132,902,223.89 |
| Cost of sales | (35,112,995.40) | (3,954,346.14) | (8,063,875.71) | (4,479,085.52) | (3,811,049.68) | (9,865,904.87) | (7,416,281.10) | - | (72,703,538.42) |
| Gross profit/(loss) | (10,809,512.93) | 62,539,361.23 | 3,005,615.33 | 3,795,893.41 | (1,808,794.16) | 3,920,652.94 | (444,530.35) | - | 60,198,685.47 |
| Other expenses | (3,583,995.30) (11,840,803.89) | (1,489,500.54) | (875,650.24) | (70,490.91) | (2,570,471.95) | (1,279,235.83) | (3,618,034.41) | (25,328,183.07) | |
| Other income | - | - | - | - | - | 1,085,692.93 | 1,918,597.47 | 2,137,811.19 | 5,142,101.59 |
| Financial income | - | - | - | - | - | - | - | 367,567.99 | 367,567.99 |
| Financial expenses | (998,915.57) | (1,209,092.61) | (203,554.94) | (153,469.20) | (38,859.59) | (272,072.39) | (155,134.67) | (375,046.31) | (3,406,145.28) |
| Profit/ (loss) before income taxes | (15,392,423.80) | 49,489,464.73 | 1,312,559.85 | 2,766,773.97 | (1,918,144.66) | 2,163,801.53 | 39,696.62 | (1,487,701.54) | 36,974,026.70 |
| Income taxes | - | - | - | - | - | - | - | (10,637,348.99) | (10,637,348.99) |
| Net profit / (loss) after taxes | (15,392,423.80) | 49,489,464.73 | 1,312,559.85 | 2,766,773.97 | (1,918,144.66) | 2,163,801.53 | 39,696.62 | (12,125,050.53) | 26,336,677.71 |
| Depreciation and amortisation (inclunding right-of | |||||||||
| use assets depreciation) | 7,032,749.88 | 3,680,584.79 | 856,729.21 | 1,184,217.32 | 1,261,037.61 | 2,358,492.24 | 1,614,141.32 | 243.06 | 17,988,195.43 |
| (Losses)/Earnings before Interest, Taxes, | |||||||||
| Depreciation and Amortisation | (7,360,758.35) | 54,379,142.13 | 2,372,844.00 | 4,104,460.49 | (618,247.46) | 4,794,366.16 | 1,808,972.61 | (1,479,980.16) | 58,000,799.42 |
* Restated amounts due to change in accounting policy (See note 3.1)
Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
Revenues are analyzed as follows:
| 1/1-31/12/2021 | 1/1-31/12/2020 | |
|---|---|---|
| Revenue from: | ||
| Loading and Unloading | 34,118,025.70 | 27,688,786.82 |
| Storage | 3,755,225.38 | 2,754,438.09 |
| Supply of water | 1,412,144.39 | 1,501,510.91 |
| Dry docking services | 6,660,355.12 | 6,493,397.35 |
| Cruise services | 9,511,906.83 | 1,602,704.45 |
| Ferry services | 9,443,942.88 | 7,585,085.58 |
| Environmental services | 2,400,927.50 | 2,139,231.43 |
| Mooring | 3,062,490.76 | 3,768,064.53 |
| Shipbuilding Repair Zone services | 6,713,797.70 | 7,293,160.46 |
| Other supporting services | 6,695,340.56 | 5,322,858.53 |
| Revenue from concession of liquid wastes' collection and | ||
| transportation | 318,080.71 | 259,278.40 |
| Total | 84,092,237.53 | 66,408,516.55 |
| Revenue from Fixed and Variable Consideration: | ||
| Revenue from concession agreement Pier ΙΙ+ΙΙΙ | 68,631,091.05 | 65,092,198.41 |
| Other income from concession agreement Pier ΙΙ+ΙΙΙ | 1,466,643.40 | 1,401,508.93 |
| Total | 154,189,971.98 | 132,902,223.89 |
The current year increase in revenue is mainly due to the significant increase in revenues from cruise services by € 7,909,202.38 or 493.5% and revenue from loading-unloading services by € 6,429,238.88 or 23.2% as these sectors in 2021 recovered from the prior year negative impact of the COVID-19 pandemic. Mooring revenue decreased by € 705,573.77 as well as revenues of ship repair and water supply decreased slightly.
With the resumption of the Cruise Industry in Greece on 14 May, 2021, the industry gradually marked growth both in terms of arrivals and passenger traffic. Piraeus succeeded in serving a significant number of cruise ship arrivals by implementing the required COVID-19 Health Protocols. The total passenger traffic in 2021 amounted to 303,665 compared to 16,640 in 2020, recording an increase of 1,724.9%. Cruise ship arrivals also increased by 398.7% with 379 arrivals compared to 76 last year.
The increase in revenue from the Pier II + III concession agreement is mainly due to the increase in the variable consideration which amounted to € 55,988,003.14 (31.12.2020: € 52,694,799.05).
Expenses (cost of sales and administrative expenses) are analyzed as follows:
| 1/1-31/12/2021 | 1/1-31/12/2020 Restated* |
|
|---|---|---|
| Payroll and employee related costs (Note 28) | 58,475,925.78 | 57,967,380.55 |
| Third party fees | 3,395,542.46 | 951,738.47 |
| Third party services | 11,251,090.09 | 10,019,389.26 |
| Depreciation- Amortization (Note 27) | 17,891,472.50 | 17,988,195.43 |
| Taxes and duties | 729,455.19 | 635,862.44 |
| General expenses | 4,070,005.30 | 4,098,226.69 |
| Cost of sales of inventory and consumables (Note 10) | 2,820,801.67 | 1,953,467.68 |
| Provision for pending lawsuits (Note 17) | 4,364,840.15 | (1,271,396.25) |
| Consession agreement fee (Note 20) | 2,062,798.16 | 1,331,551.38 |
| Total | 105,061,931.30 | 93,674,415.65 |
The above expenses are analyzed as follows:
| 1/1-31/12/2021 | 1/1-31/12/2020 Restated* |
|
|---|---|---|
| Cost of sales | 77,375,617.18 | 72,703,538.42 |
| Administrative expenses | 27,686,314.12 | 20,970,877.23 |
| Total | 105,061,931.30 | 93,674,415.65 |
* Restated amounts due to change in accounting policy (See note 3.1)
Third party fees: The significant increase of third party fees is due to the adoption by the Company (December 2020) of the use of external partners for the provision loading and unloading services.
Third party services (including concession agreement fee): For the year ended December 31, 2021 third party services include electricity charges of € 3,838,004.16 (31.12.2020: € 2,586,669.65), water supply charges of € 1,312,053.17 (31.12.2020: € 1,147,365.41), telecommunication charges of € 278,796.85 (31.12.2020: € 333,540.78), rental expenses (including concession agreement fee) of € 2,187,449.54 (31.12.2020: € 1,439,398.51), insurance expenses of € 1,063,419.02 (31.12.2020: € 1,044,474.97), repair and maintenance costs of € 2,495,627.29 (31.12.2020: € 2,088,013.66) and other expenses of € 2,138,538.26 (31.12.2020: € 2,711,477.66). Additionally, third party services include the fees of the company "PricewaterhouseCoopers" in Greece for the services provided related to statutory audit fees for the financial statements (€ 141,500.00) and tax audit certificate in accordance with article 65A of L. 4174/2013 and the POL 1124/18.06.2015 decision of the General Secretary of Public Revenue of the Ministry of Finance (€ 25,000.00) as well as other non – audit services (€ 11,750.00).
The amounts are analyzed as follows:
| 1/1-31/12/2021 | 1/1-31/12/2020 | |
|---|---|---|
| Rental income | 3,400,757.54 | 3,034,540.40 |
| Income from European Union programs | 429,828.41 | 476,767.19 |
| Insurance compensation | 224,679.38 | - |
| Rental subsidy due to COVID-19 | 127,342.25 | - |
| Surcharges of the debt from project contractor of Pier I | - | 678,266.60 |
| Various other operating income | 564,510.64 | 952,527.40 |
| Total | 4,747,118.22 | 5,142,101.59 |
Rental income concerns land and building rents as well as the investment properties rent (Note 6).
The Company as an administration and operator of the port of Piraeus does not belong to the legal entities under public law or public limited companies, the majority of the share capital of which belongs directly or indirectly to the Greek State of article 68 par. 2 of the 13.4.2020 Legislative Content Act (A ' 84), as it was veryfied by article 1 of law 4690/2020 (A '104) and as it was amended by article 16 of law 4728/2020. Therefore, it decides with a relevant act of its administrative body the exemption from the obligation to pay financial compensation for the concessioned rights of use of Piraeus port area areas, that are affected by the special and extraordinary measures related to the coronavirus COVID-19, taking into account the market and related decisions of the government.
Regarding the exemption from the obligation to pay the rents of the professional leases that the Company has concluded and concern its private property, it applies the Legislative Content Act of 20.03.2020 (A '68) as it was veryfied by article 1 of law 4683 / 2020 (Government Gazette AD 83) and its relevant issued decisions.
According to legislative regulations, the companies that have been taken special and extraordinary measures to suspend or temporarily ban operation for preventive or repressive reasons related to pandemic COVID-19, is exempted from the obligation to pay 40% of the total rent from March 2020 to June 2021. Τhe Company applied the above legal regulations for the lease of its premises to third parties. As a state subsidy for the reduction of rents the Company received the amount of € 127,342.25 during the current period.
During the previous year, the receivable of the contractor company "Pier I" was collected and the amount of € 678,266.60, related to the penalty on late payment.
The amounts are analyzed as follows:
| 1/1-31/12/2021 | 1/1-31/12/2020 | |
|---|---|---|
| Third parties compensation | 156,190.61 | 566,663.30 |
| Loss on disposal of fixed assets | 14,264.81 | 401,296.11 |
| Other expenses | 409,650.96 | 662,475.62 |
| Total | 580,106.38 | 1,630,435.03 |
The third parties compensations relate mainly to interest compensations according to court decisions finalized against Company.
The amounts are analyzed as follows:
| 01/01-31/12/2021 | 1/1-31/12/2020 | |
|---|---|---|
| Interest income and related financial income | 9,790.90 | 327,917.69 |
| Finance cost for lease liabilities (Note 5) | (2,433,961.29) | (2,472,612.61) |
| Interest expense and related financial expenses | (874,372.33) | (933,532.67) |
| (3,298,542.72) | (3,078,227.59) | |
| Interest income on debtors late payments | 96,585.78 | 39,650.30 |
| Total | (3,201,956.94) | (3,038,577.29) |
The amounts are analyzed as follows:
| 1/1-31/12/2021 | 1/1-31/12/2020 | |
|---|---|---|
| Depreciation of property, plant and equipment (Note 4) | 15,998,993.46 | 16,274,157.42 |
| Software depreciation (Νote 7) | 627,703.77 | 496,066.31 |
| Depreciation of right of use assets (Note 5) | 2,129,500.19 | 2,082,696.64 |
| Fixed assets subsidies depreciation (Note 15) | (864,724.92) | (864,724.94) |
| Total | 17,891,472.50 | 17,988,195.43 |
The amounts are analyzed as follows:
| 01/01-31/12/2021 | 1/1-31/12/2020 | |
|---|---|---|
| Wages and salaries | 43,130,552.48 | 43,062,001.04 |
| Social security costs | 9,832,978.59 | 10,334,928.70 |
| Other staff costs | 2,068,629.57 | 1,378,987.76 |
| Provision for staff leaving indemnities (Note 16) | 1,821,366.68 | 2,428,514.69 |
| Employee retirement incentives | 1,338,000.00 | 695,257.07 |
| Provision for cash-settled share based payments | 284,398.46 | 67,691.29 |
| Total | 58,475,925.78 | 57,967,380.55 |
* Restated amounts due to change in accounting policy (See note 3.1)
The Company announced in prior years the offer of voluntary retirement incentives to those employees who are close to retirement date.
During the previous year, 9 workers and 8 employees made use of the incentives of € 461,257.07 and an additional provision of € 234,000.00 for 4 workers and 7 employees was recorded. Also, a worker made use of incentives amount of € 22,500.00 consequently to reverse the relevant provision that had been made on 31/12/2019.
In the current year 11 workers and 48 employees made use of the incentives of € 1,338,000.00. Also, the relevant provision that was recorded at 31/12/2020 was used for 4 workers amount of € 90,000.00 and 8 employees and amounted € 166,500.00. The provision for retirement incentives as at 31 December 2021 amounted to € 0 (December 31, 2020: € 256,500.00) (Note 20). According to the decision 25 / 15-04-2021 of the BoD Chairman, the employees eligible for these incentives had to retire until 30/09/2021. Therefore there is no intention to continue the incentive program beyond 30/9/2021.
The Extraordinary General Meeting of the Company's shareholders on September 23, 2019 approved the long-term incentive bonus plan, which is cash settled of a certain number of Incentive Units. Beneficiaries of the program are qualified members of the Board of Directors, senior executives and other key management and business executives who have a significant influence on the performance and uninterrupted operation of the Company.
The total number of Incentive Units in the Program is six hundred sixty-six thousand (666,000) and 80% of the Incentive Units, equal to five hundred thirty-two thousand eight hundred (532,800) Incentive Units, were allocated to the first Award date, and the remaining 20% of the total number of Incentive Units, namely one hundred thirty three thousand two hundred (133,200) Incentive Units, was reserved for beneficiaries that will join the Company or be promoted to beneficiary positions after the First Award Date and until 31 October 2020 Award date. Any key management personnel joining the Company after 31 October 2020 will not benefit from the Program.
The Board of Directors of the Company at the meeting of October 25, 2019 named the beneficiaries of 498,200 units at the first award date (October 8, 2019). The minutes of the Board of Directors of December 22, 2020 named the beneficiaries of the program including the new-coming qualified managers and/or promoted managers and canceling the Incentive Units of the beneficiaries who left the Company during the period between the grant date and 31 October 2020 along with the remaining unallocated units. Following this decision of the Board of Directors, there is no change in the Units of the program regarding the issuance of new units. The Board of Directors of the Company at the meeting of December 6, 2021 decided the cancellation of 92,000 units.
In more detail, the movement of the Program Units during the year and the final Units are listed in the table below:
| Number of Units | ||
|---|---|---|
| January 1, 2020 | 498,200 | |
| Forfeited units | (54,900) | |
| Granted units | 47,900 | |
| December 31, 2020 | 491,200 | |
| Forfeited units | (92,000) | |
| Granted units | - | |
| December 31, 2021 | 399,200 |
The amount payable to the beneficiaries is determined by the increase in the share price from the grant date (8/10/2019: € 22.53) and the redemption date. The amount payable is determined by the same parameters for the units granted in 2020. In addition, the redemption of the Incentive Units depends on the achievement of predetermined performance criteria of the Company and the Beneficiaries.
After fulfilling the Program's performance criteria over two years, the Incentive Units will be redeemed on specific dates on the 2nd, 3rd and 4th anniversary from the date of the first award with the possibility of being redeemed by the 7th anniversary by the above dates. The date of the first expiration, provided that no redemption, will take place after the seventh (7th) anniversary. During the 2nd anniversary of the 1st award date (8/10/2021) due to non-fulfillment of the performance criteria of the Program, no unit was redeemed.
The fair value of the long-term incentive bonus plan as of December 2019 was determined using the Binomial model with the following data:
| Share price at measurement date | Εuro 21.85 |
|---|---|
| Expected share voladility | 25% |
| Dividend yield | 2% |
| Risk-free interest rate | 0% |
The fair value of the units of the long-term reward plan granted during the fiscal year 2020 was determined using the Binomial model with the following data:
| Share price at measurement date | Εuro 17.86 |
|---|---|
| Expected share voladility | 30% |
| Dividend yield | 2% |
| Risk-free interest rate | 0% |
The valuation of the liability as at December 31, 2021 amounted to € 952,089.75 (31 December 2020 € 667,691.29) and is recorded in line item "Other long-term liabilities".
The earnings per share for December 31, 2021 and 2020 are as follows:
| 1/1-31/12/2021 | 1/1-31/12/2020 | ||
|---|---|---|---|
| Restated* | |||
| Net profit for the year | 36,761,709.86 | 26,336,677.71 | |
| Weighted average number of shares | 25,000,000 | 25,000,000 | |
| Basic Earnings per share | 1.4705 | 1.0535 |
* Restated amounts due to change in accounting policy (See note 3.1)
(c) Minimum Future Rents: The minimum future concession and rental income receivable, arising from the existing rental agreements are as follows:
| 31/12/2021 | |
|---|---|
| Within 1 year | 14,248,075.79 |
| Beetween 1 and 2 years | 13,706,007.96 |
| Beetween 2 and 3 years | 13,558,551.93 |
| Beetween 3 and 4 years | 13,445,672.53 |
| Beetween 4 and 5 years | 13,428,069.23 |
| Over 5 years | 244,433,546.89 |
| Total | 312,819,924.32 |
(d) Commitments for investments based on concession arrangement: Pursuant to the provisions of the Concession Agreement signed between the Company and the Hellenic Republic dated on 24.06.2016, as ratified by Law 4404/2016 (Gov. Gazette A '126 / 08.07.2016), the Company has the contractual obligation for the implementation of investments in projects within the Port of Piraeus for the five years, August 2016 - August 2021 amounting to € 293.8 million. The Concession Agreement included specific terms regarding the conditions for the imposition of penal clauses by the Greek State, in case of non-execution of mandatory investments as of August 2021. The possibility of imposing penalties under the Concession Agreement was assessed by Compamy Management during the previous period and was deemed remote, as the Company was able to prove that delays in the execution of mandatory investment projects were outside the Company's reasonable control and therefore fell within the exemption from the imposition of penalties in Article 16.5 (a) (i) of the Contract Concession. This assessment was verified with the agreement of 22/09/2021 Amendment the Concession Agreement between the Company and the Greek State as verified by Law 4838 / 1.10.2021 Government Gazette 180 A '(Note 3(t)).
As at December 31, 2021, the mandatory investments comprise of:
The Company provides services to certain related parties in the normal course of business. The Company's transactions and account balances with related companies are as follows:
| Related party | Relation with the Company | Year ended | Sales to related parties |
Purchases from related parties |
|---|---|---|---|---|
| PIRAEUS CONTAINER TERMINAL S.A | Related Party | 31.12.2021 | 78,206,476.27 | 73,513.45 |
| 31.12.2020 | 72,306,665.57 | 80,347.77 | ||
| COSCO SHIPPING LINES GREECE S.A | Related Party | 31.12.2021 31.12.2020 |
44,934.22 370,355.24 |
9,112.93 56,323.85 |
| PCDC A.E. | Related Party | 31.12.2021 | 36,555.59 | - |
| 31.12.2020 | 35,941.94 | 3,240.00 | ||
| CHINA COSCO SHIPPING CORPORATION LIMITED | Related Party | 31.12.2021 31.12.2020 |
- 124,585.75 |
- - |
| COSCO SHIPPING DEVELOPMENT CO. LTD | Related Party | 31.12.2021 | 27,300.00 | - |
| 31.12.2020 | 78,050.00 | - | ||
| 31.12.2021 | - | 9,244.91 | ||
| COSCO SHIPPING TECHNOLOGY Co LTD | Related Party | 31.12.2020 | - | 58,684.08 |
| 31.12.2021 | - | |||
| COSCO (HONG KONG) INSURANCE BROKERS L.T.D. | Related Party | 31.12.2020 | - - |
509,727.44 596,748.58 |
| 31.12.2021 | 106,346.61 | |||
| COSCO SHIPPING GLOBAL EXH | Related Party | 31.12.2020 | - - |
35,790.00 |
| 31.12.2021 | ||||
| COSCO SHIPPING TECHNOLOGY (BEIJING) | Related Party | 31.12.2020 | - - |
83,570.51 - |
| COSCO SHIPPING PORTS LIMITED | Related Party | 31.12.2021 31.12.2020 |
- - |
95,145.41 - |
| 31.12.2021 | 78,315,266.08 | 886,661.26 | ||
| 31.12.2020 | 72,915,598.50 | 831,134.28 | ||
| Related Party | Relation with the Company | Year ended | Amounts due from related parties |
Amounts due to related parties |
| 31.12.2021 | 2,635,950.59 | 7,776.48 | ||
| PIRAEUS CONTAINER TERMINAL S.A | Related Party | 31.12.2020 | 1,992,540.54 | 4,526.33 |
| 31.12.2021 | - | 35,164.30 | ||
| COSCO SHIPPING LINES GREECE S.A. | Related Party | 31.12.2020 | 382,088.08 | 570.40 |
| 31.12.2021 | - | - | ||
| PCDC A.E. | Related Party | 31.12.2020 | 316.74 | - |
| 31.12.2021 | - | - | ||
| COSCO (HONG KONG) INSURANCE BROKERS L.T.D. | Related Party | 31.12.2020 | - | 478,094.95 |
| 31.12.2021 | 181.91 | - | ||
| COSCO SHIPPING DEVELOPMENT CO. LTD | Related Party | 31.12.2020 | 156.91 | - |
| 31.12.2021 | 2,636,132.50 | 42,940.78 | ||
| 31.12.2020 | 2,375,102.27 | 483,191.68 |
The revenues of € 70,097,734.43 (2020: € 66,493,707.34) (Note 23) from Piraeus Container Terminal S.A. (PCT S.A.) are related to the fixed and variable revenue from the concession agreement (PIER II & III) and revenues of € 8,108,741.83 (2020: € 5,812,958.23) related to mooring and loading/uploading. Besides, PPA in April 2020, signed a contract about the provision of project management services with PCT S.A. for the business operation of Pier I of PPA S.A. On December 29, 2020, the letter of guarantee from PCT S.A. with the amount € 42.0 million, reduced by 50% to € 21.0 million in previous year, and the letter of guarantee with the amount € 475,000.00, reduced from € 950,000.00 by 50% in previous year, were returned to PCT S.A. On the same date, a new letter of guarantee of € 663,000.00 regarding the rest of the construction of the west side of Pier III for the construction works of Pier II and III was received (Note 21).
The transactions with COSCO SHIPPING LINES GREECE S.A. relate to ship services.
The transactions with COSCO SHIPPING DEVELOPMENT CO. LTD are related to ship repair services for their vessels.
The transactions with COSCO SHIPPING GLOBAL EXH relate to exhibition expenses.
The transaction with COSCO SHIPPING TECHNOLOGY (Beijing) relates to software licence renewal.
The transaction with COSCO (HONG KONG) INSURANCE BROKERS L.T.D. of the current and the previous period relates to the insurance coverage of PPA S.A. regarding third party liability, employer' s liability, property and business interruption and directors and officers liability, according to article 17 of the Concession Agreement (Law 4404/2016).
The transaction with CHINA COSCO SHIPPING CORPORATION LIMITED of the previous year relates to its participation to Company's advertising expenses.
The transaction with COSCO SHIPPING PORTS LIMITED is related to software for tax interconnection services with the SAP software.
The transaction with COSCO SHIPPING TECHNOLOGY Co. LTD of the previous year relates to software support costs.
Board of Directors Members Remuneration: During the year 2021, remuneration and attendance costs, amounting to € 889,082.91 (2020: € 910,855.30) were paid to the Board of Directors members. Furthermore during the year ended December 31, 2021 emoluments of € 554,857.42 (December 31, 2020: € 557,368.68) were paid to Managers / Directors for services rendered.
The Extraordinary General Meeting of the Company's shareholders on September 23, 2019 approved the long-term incentive bonus plan, which is cash settled of a certain number of Units. Beneficiaries of the program are members of the Board of Directors, senior executives and other key management and business executives who have a significant influence on the performance and uninterrupted operation of the Company (Note 28).
Fair Value: The carrying amounts reflected in the accompanying sheets of financial position for cash and cash equivalents, trade and other accounts receivable, prepayments, trade and other accounts payable and accrued and other current liabilities approximate their respective fair values due to the relatively short-term maturity of these financial instruments.
The fair value of variable rate loans and borrowings approximate the amounts appearing in the statements of financial position.
The Company categorized its financial instruments carried at fair value in three categories, defined as follows:
Level 1: Quoted (unadjusted) values from active financial markets for identical negotiable assets or liabilities.
Level 2: Other techniques for which all inflows that have a significant impact on the recorded fair value are identified or determined directly or indirectly from active financial markets.
Level 3: Techniques that use inflows that have a significant impact on the recorded fair value and are not based on quoted prices from active financial markets.
During the years ended December 31, 2021 , there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements.
As at December 31, 2021 and 2020, the Company held the following financial and non financial instruments:
| December 31, 2021 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial liabilities | ||||
| Interest bearing loans and borrowings (including short term portion) |
- | 44,499,999.99 | - | 44,499,999.99 |
| Investment property | - | - | 734,338.38 | 734,338.38 |
| Non-current assets held for sale | - | - | - | - |
| December 31, 2020 | Level 1 | Level 2 | Level 3 | Total |
| Financial liabilities | ||||
| Interest bearing loans and borrowings (including short term portion) |
- | 50,499,999.99 | - | 50,499,999.99 |
| Investment property | - | - | 734,338.38 | 734,338.38 |
| Non-current assets held for sale | - | 183,500.00 | - | 183,500.00 |
Credit Risk: There is no significant credit risk for the Company towards the contracting parties, since it receives advance payments or letters of guarantee from customers. In addition, the Company's deposits are placed in bank financial institutions in Greece with the following ratings (Moody's credit rating):
| December 31, | December 31, | ||
|---|---|---|---|
| 2021 | 2020 | ||
| Β2 | 102,383,876.42 | Caa1 | 97,735,374.28 |
| Β3 | 32,775,682.28 | Caa1 | 13,794,460.22 |
| Total | 135,159,558.70 | 111,529,834.50 |
(amounts in Euro unless stated otherwise)
Foreign Exchange Risk: The Company is neither involved in international trade nor has any long term loans in foreign currency and therefore is not exposed to foreign exchange risk resulting from foreign currency rate variations.
Interest rate risk: The Company's borrowings consist of two loans in Euro and one is subject to fixed interest rate and the other one to floating interest rate (Note 18). The Company does not use derivatives in financial instruments in order to reduce its exposure to interest rate risk fluctuation as at the balance-sheet date. The Company management believes that there is no significant risk resulting from a possible interest rate fluctuation.
The table below presents and analyses the sensitivity of the result in relation to financial assets (cash on hand and in banks) and financial liabilities (loans) of the Company to the interest rate risk changes assuming a simultaneous change in interest rates by ± 100 basis points on the Company's profit.
Liquidity risk: The effective management of liquidity risk is secured by ensuring maintenance of adequate cash reserves and a possibility for funding if necessary. Corporate liquidity risk management is based on rationale management of working capital and cash flows.
The following table summarizes the maturities of financial liabilities December 31, 2021 and 2020, respectively, under the relevant contracts to non-discounted prices.
| 2021 | Decrease | (Increase) | |
|---|---|---|---|
| Financial assets | Accounting values | +100bips(Euribor) | -100bips(Euribor) |
| Cash and cash equivalents | 134,975,285.73 | 1,349,752.86 | (1,349,752.86) |
| Effect before income tax | 1,349,752.86 | (1,349,752.86) | |
| Income tax 24% | (296,945.63) | 296,945.63 | |
| Net effect | 1,052,807.23 | (1,052,807.23) | |
| Financial liabilities | |||
| Long term loans | (44,499,999.99) | (445,000.00) | 445,000.00 |
| Effect before income tax | (445,000.00) | 445,000.00 | |
| Income tax 24% | 97,900.00 | (97,900.00) | |
| Net effect | (347,100.00) | 347,100.00 | |
| Total net effect | 705,707.23 | (705,707.23) |
| 2020 | Decrease | (Increase) | |
|---|---|---|---|
| Financial assets | Accounting values | +100bips(Euribor) | -100bips(Euribor) |
| Cash and cash equivalents | 111,354,314.06 | 1,113,543.14 | (1,113,543.14) |
| Effect before income tax | 1,113,543.14 | (1,113,543.14) | |
| Income tax 24% | (267,250.35) | 267,250.35 | |
| Net effect | 846,292.79 | (846,292.79) | |
| Financial liabilities | |||
| Long term loans | (50,499,999.99) | (505,000.00) | 505,000.00 |
| Effect before income tax | (505,000.00) | 505,000.00 | |
| Income tax 24% | 121,200.00 | (121,200.00) | |
| Net effect | (383,800.00) | 383,800.00 | |
| Total net effect | 462,492.79 | (462,492.79) |
Liquidity risk: The effective management of liquidity risk is ensured by maintaining sufficient cash and the availability of financing in case of need. Corporate liquidity risk management is based on the proper management of working capital and cash flows.
The following table summarizes the maturity dates of the financial liabilities of 31 December 2021 and 2020 respectively, arising from the relevant contracts at unpaid prices.
| Amounts of fiscal year 2021 | Current portion | Less than 6 months |
6-12 months | 1 to 5 years | >5 years | Total |
|---|---|---|---|---|---|---|
| Borrowings | - | 3,031,400.42 | 3,029,374.58 | 24,162,066.67 | 14,536,464.99 | 44,759,306.66 |
| Lease liabilities | 3,496.15 | 3,515,530.77 | 10,346.15 | 14,000,000.00 | 91,437,500.00 | 108,966,873.07 |
| Trade and other payables* | 6,653,055.85 | 8,301,662.10 | 4,022,595.27 | - | - | 18,977,313.22 |
| Total | 6,656,552.00 | 14,848,593.29 | 7,062,316.00 | 38,162,066.67 | 105,973,964.99 | 172,703,492.95 |
| Amounts of fiscal year 2020 | Current portion | Less than 6 months |
6-12 months | 1 to 5 years | >5 years | Total |
| Borrowings | - | 3,035,612.50 | 3,033,577.50 | 24,195,360.00 | 20,565,119.99 | 50,829,669.99 |
| Lease liabilities | 3,710.00 | 3,511,860.00 | 8,534.67 | 14,000,000.00 | 94,937,500.00 | 112,461,604.67 |
| Trade and other payables* | 4,581,933.78 | 5,978,848.60 | 3,858,781.59 | - | - | 14,419,563.97 |
| Total | 4,585,643.78 | 12,526,321.10 | 6,900,893.76 | 38,195,360.00 | 115,502,619.99 | 177,710,838.63 |
* Trade payables do not have interest and are settled in up to 60 days. Other payables also do not bear any interest and are settled in up to 12 months.
The primary objective of the Company's capital management is to ensure the maintenance of high credit rating, and healthy capital ratios in order to support and expand the Company's operations and maximize shareholder value. The Company's policy is to maintain leverage targets, according to an investment grade profile. The Company monitors capital adequacy using the ratio of total debt to operating profits, which should be lower than 9.80 based on the loan agreements (Note 18). The debt includes interest-bearing loans and lease liabilities, while the operating profit includes profit/(loss) before taxes, financing costs and depreciation.
| December, 31 | |||
|---|---|---|---|
| 2021 | 2020 Restated* | ||
| Long-term borrowings | 38,499,999.99 | 44,499,999.99 | |
| Short-term borrowings | 6,000,000.00 | 6,000,000.00 | |
| Lease liability (long-term/short-term) | 65,435,982.72 | 66,538,481.42 | |
| Total Debt (including lease liabilities) | 109,935,982.71 | 117,038,481.41 | |
| Earnings before interest, tax, depreciation and amortization | |||
| (EBITDA) | 70,304,423.14 | 58,000,799.42 | |
| - Total Debt / EBITDA | 1.56 | 2.02 |
* Restated amounts due to change in accounting policy (See note 3.1)
The recent geopolitical events in Ukraine, the military actions from Russia and the subsequent response from European Union and European countries as well as the United States in the form of economic sanctions could affect global energy markets and economic developments in general and specifically to the Company. The Company is following developments around the crisis in Ukraine and is planning accordingly, however, its activities do not appear to be significantly affected. The Company regards these events as non-adjusting events after the reporting period, the potential effect of which cannot be estimated at the moment.
Except the above, there are no other events subsequent to December 31, 2021 which would influence materially the Company's financial position.
Piraeus, March 14, 2022
CHAIRMAN OF THE BOARD OF
DIRECTORS CHIEF EXECUTIVE OFFICER (ACTING) FINANCIAL MANAGER
YU ZENG GANG ZHANG ANMING IOANNIS KOUKIS License No. Ο.Ε.Ε. 0007437 A' Class
Passport No ΡΕ1895434 Passport No PE2110665
PIRAEUS PORT AUTHORITY S.A Annual Financial Report for the year ended December 31, 2021 (amounts in Euro unless stated otherwise)
The annual financial report of the Company, the independent auditor's report and the Management Reports are available to the website www.olp.gr.
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